Innovation now: I’ve stopped taking buyer’s checks for earnest money, but now I want to stop worrying about wire transfers, too.

by Greg Swann

Suburban Phoenix Real Estate Broker

Author website

I’m living much of my time right now with my nose pressed right up against one tool or another — listings, DocuSign, the steering wheel, et endlessly cetera. That’s cool, we need the dough, and we can’t make it rain hard enough, fast enough. But by this point I have no idea if something I’m doing is an innovation or not. I’m just dancing as fast as I can.

This topic just came up, and I’m passing it along because I haven’t done that here yet. I know this because I hadn’t done it with my wife and business partner until just now.

Here’s the scoop: I’ve all but stopped taking earnest checks. I’m having almost all of my buyers wire their earnest money deposits directly into title. I never touch anyone’s else’s money — the only known way a real estate broker can be assured of escaping imprisonment.

But that’s not my reason for coming to do things this way. I used to take the check, made out to Chicago or Fidelity or whatever, then schlep it around while I waited for the contract to be executed. Not fun but not onerous — just inefficient.

By now, I do a lot of REOs as rental home investments for out-of-state buyers. I don’t know the name of the title company when we write the contract, and the buyer is back home by the time we need to deposit the funds.

I don’t even talk about checks any longer. I tell the buyer how things work and that I will have title email wiring instructions when we’re ready to rock. Totally transparent, totally arm’s-length, and no one involved in the process says boo.

If the lister is a little too adamant about receiving a PDF of a fax of a scan of a photocopy of a useless check, I will add language like this: “Seller is aware that Buyer will deposit Earnest Money by wire transfer into Title Company, to be determined by Seller, within one business day after Seller’s final acceptance of this Purchase Contract and any incorporated addenda.” (Reminder: I am not your broker.)

It’s the perfect solution — almost.

Bank wires move slowly, this because banks want to milk their own depositors for interest — float. The banks will blame it on their antique computing hardware, but if you take quick look around whatever room you happen to be in right now, I expect you can lay eyes on a computer that can move money at internet speeds — instantaneously.

So here’s a push we can all make, all at once: Praise the gods, our friends at the title companies have all just discovered email — and Twitter and Facebook. How about let’s introduce them to PayPal?

Here’s what I want: When an owner-occupant buyer of a seller-actually-has-folding-green-equity home tells me he doesn’t want to have to go through the hassle of a wire transfer, I want to be able to say, “No problem. You can pay by debit or credit card on the title company’s web site. They’ll charge you a small processing fee, but the money will move in real time with zero hassles.”

So: For my own part: Chicago Title, I’m calling you out. This is good business, good marketing and good PR — you can brag about it in your spam. This is the next step in your emergence into the world of internet commerce.

Go ye and do likewise with the title company you favor. This is what Bloodhounds can do for the real estate industry: Help it to grow up.