What Is a Real Estate Deposit Receipt?

Definition & Examples of Deposit Receipts

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A deposit receipt is the form used to show receipt of an earnest money deposit, most commonly when buying a home.

What Is a Deposit Receipt?

An earnest money deposit is usually paid to a title company, escrow company, or real estate brokerage when an offer is made to buy a home. This entity prepares a deposit receipt to prove the buyer actually handed over the earnest money deposit.

The trend today is for the title company and/or escrow officer to issue the deposit receipt. This is generally issued after the buyer's earnest money deposit has been deposited into the title or escrow company's bank account. It will often contain the following information:

  • Name of title company
  • Address of title company
  • Name of title company's bank
  • The title company's bank account number
  • The receipt number
  • The escrow number
  • The property address
  • Date of deposit
  • Name of person who received the receipt
  • Amount of the deposit
  • Name(s) of the payor, which is usually the buyer
  • Copy of the original check

If the deposit receipt is handled by the real estate brokerage, it will be entered into the broker's trust account. To deposit funds from a buyer into any other kind of trust account might be a violation of state law, and real estate brokers are not allowed to co-mingle funds.

  • Alternate name: Receipt for Deposit

How a Deposit Receipt Works

A common way to handle the initial deposit check is to allow the buyer to wire the funds directly to the title or escrow company's bank. But a home buyer will still need evidence of that deposit to produce for their mortgage lender, and this is why a deposit receipt is imperative for a home buyer to obtain.

The lender will want to see that the original earnest money deposit came from the buyer's personal funds.

If it was paid by a third party on behalf of the borrower, the mortgage lender will require additional documentation. In turn, the mortgage lender will check the borrower's bank statement to make sure the money in the buyer's bank account was not recently deposited from an unknown source.

It's what is commonly referred to as seasoning of funds. A mortgage lender needs to identify the source of the funds. The funds must be in the buyer's account for a certain time period, after which time the source of funds is not nearly as important. The lenders look for documentation beyond the deposit receipt to make sure the borrower is using their own money to buy a home because if not, they might not be able to meet future mortgage payments.

Key Takeaways

  • A deposit receipt is a record that a buyer paid an earnest money deposit.
  • It is most commonly used in conjunction with real estate.
  • The receipt is essential to prove the buyer deposited the funds.
  • Funds must come from the buyer's resources.