Hi everyone,

I have a friend that is buying a house in Virginia. She had written a check for a house she was bidding on and lost the bid. The agent kept the check since my friend was still looking at houses. Then she found another house that was on short sale and without her knowledge or consent, the agent use the check that my friend wrote for the first house to deposit on the short sale house which she was approved for. We spoke to his supervisor and they said they can do that. It does not seem right, so I was wondering if that is legal? Any advise or suggestion would be appreciated. Thank you for your help in advance.

Depending on the state regulations governing earnest money, but generally it can be done as long as the broker shows a "paper trail" and notes on the old offer that the earnest money was transferred to a new offer and the new offer shows a note that the earnest money was transferred from a previously declined offer. Their earnest money ledger book would need to reflect the same sort of documentation.

I've done it its quite commen. The check is not deposited until after acceptance, only a copy of the check is submitted. I guess the only difference is, my client knew that the original check would be deposited on the 2nd house upon acceptance.

My clients do this all the time and I only do this with their knowledge and approval. We go from offer to offer using the same check, never opening escrow until we are ratified. Depending on where your friend is in Virginia, it may be hard to win a bid as some areas are very active with a low inventory. When representing the buyer in a short sale, I use a promissory note due upon third party approval. A check would be needed to open escrow when the bank approves the short sale.