TRID Q&A: How to Handle Earnest Money at Closing
September 20, 2017
Question: It is my understanding that you may not deduct the earnest money from the real estate agent's commission any more at closing. The real estate agent must bring a check to closing for the earnest money – is this correct?
Answer: There is no prohibition in the rule that prevents the deduction of the earnest money from the real estate agent’s commission. That being said, you must disclose the amount of the commission that is paid to the real estate agent, “regardless of the identity of the party holding any earnest money deposit.” Official Interpretation 38(g)(4)-4. To comply with this requirement, you should disclose the amount of the commission and the deposit/earnest money, along with the payee of these items, on the Closing Disclosure.
Have questions or issues about TRID that you need answered? Send an email to [email protected]. ALTA will address common questions/issues here on its blog.