Do You Cash the Earnest Money Check Right Away?

Top 50 Questions about Farmland

No, the earnest money check is not cashed immediately. However, it is processed promptly in compliance with Iowa Real Estate Commission rules, which require it to be deposited into a trust account within five days.

How the Process Works

1. Post-Auction Communication:

   • After the auction, the buyer typically notifies their bank about the earnest money.
   • The auction team also verifies with the bank that funds are available.

2. Transfer to Attorney:

   • The check is delivered to the seller’s attorney or the designated trust account manager as soon as possible.

3. Trust Account Deposit:

   • The attorney deposits the funds into a trust account within approximately two days of receiving the check.

Why the Process Matters

• Compliance: Iowa law ensures funds are handled securely and transparently.
• Trust Account: The money is safeguarded until the transaction closes, ensuring both parties are protected.

Key Takeaways

1. The earnest money check must be deposited into a trust account within five days.
2. The process involves verification, communication with banks, and transfer to the attorney.
3. Funds are securely held in a trust account until the transaction is finalized.

For smooth transactions and expert guidance, contact David Whitaker – Iowa Land Guy for your farmland buying or selling needs!

David Whitaker | Iowa Land Guy