John Mosey, CEO of NorthstarMLS is known to be one of those leaders that when he finds a business challenge his brokers face, he will do his best to find a solution. He is not afraid to go first. As such he has helped to bring to market many exciting new products that serve the greater good. I had the pleasure of interviewing him about the latest gem he has brought to the market for his subscribers. TrustFunds , led by Lynn Leegard, was inspired by challenges she faced when she was General Counsel for Edina Realty, based in Minneapolis, Minnesota.

Many of you may know Edina Realty. They are the crown jewel of Home Services of America and they hire only the best and brightest. This exciting new service has helped automate one of the last elements of transactions that are not handled online — the delivery and deposit of earnest money. John told me that when he began to talk to his Executive Committee about how earnest money is handled, many became very sheepish.

They readily admitted that earnest money is not handled as carefully or safely as it should be. Most transaction documents are processed, signed and distributed from secure online servers.

Earnest money, on the other hand is collected by hand. Earnest money is the last process in the real estate transaction that has not been brought online. Next the Listing Agent takes the check to the Designated Trust Account Holder DTAH , which could be the listing broker or title company.

Fourth, the check gets deposited in a Trust Account. While all of these steps are going on nobody in the process knows the status of those checks.

Everybody in the transaction is waiting for the check to deposit and settle, yet they are all unaware of the status. Copies, scans and faxes of the checks can end up in unknown hands. In the age of identity theft, the agent and broker opens themselves up to a ton of risk by not protecting banking information more carefully. Many of our brokerage clients have been the victims of wire fraud.

Hackers are getting really clever today. They create an email that looks like a legitimate email address from a Gmail account or even a brokerage account email address. Then the hackers send a nefarious email with a fraudulent location for wiring the money. There is another risk that can be a problem for brokers. If earnest money is mishandled, delivery and deposit deadlines can be missed. Without proof of regulatory compliance a broker can be subject to liability.

TrustFunds has completely overhauled this ineffective earnest money process with a whole new approach. The solution offers four key advantages:. TrustFunds takes the entire manual process and brings it online into a secure environment.

It makes it really easy for a buyer to process their earnest money payment online. The agent facilitates the process through a couple of simple clicks initiated on the listing detail page within the MLS. The system provides complete transparency on the progress of the payment as well as the payment history. First the agent clicks on the TrustFunds Electronic Earnest Money Deposit link on the listing detail page.

Last, the buyer goes online and pays the earnest money. The email sent identifies an image of the agent AND an image of the property as a failsafe. The email also identifies the name of the agent and the buyer. In addition, it includes the specific amount of the earnest money agreed to in the purchase agreement and other specific property details that would not be known to a typical phishing scam for identification purposes as well.

The buyer then enters their payment information directly. The system again identifies both the property and agent with a photo and detailed information as a double fail safe. TrustFunds provides real-time access to the status of earnest money for all of the transactions in one easy dashboard.

Who Holds the Buyer’s Earnest Money Check — and Why it Matters

For every transaction there is a complete payment history that is provided putting the broker in complete regulatory compliance. In addition, lenders have loved the convenience of the Payment History Report instead of a photocopy of a cancelled check. The program is really easy for MLSs to execute. The TrustFunds system gets installed seamlessly inside of the MLS system making it really easy for the agent to find it and access it.

The MLS pays for it as a core service to make it network-wide.

Agents do not have to be separately signed up on TrustFunds. If they are a subscriber of NorthstarMLS they can use TrustFunds to collect earnest money from their client and communicate the status of earnest money. Typically in Minnesota the listing broker holds the earnest money.

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John Mosey, CEO of NorthstarMLS told me that TrustFunds did a lot of the legwork for the MLS working with Minneapolis brokers to get them to add their trust accounts into the system. The system has been designed to adapt to every type of earnest money process. They immediately saw the benefit of the system. They believe it is both a major convenience and risk management tool. Much like Electronic Signatures, online payment of earnest money has made it a LOT easier to close transactions more quickly.

Minneapolis brokers do NOT believe that TrustFunds levels the playing field in any way. They say that it is important service that helps improve the efficiency and security of the real estate market.

TrustFunds delivers convenience, security and transparency and helps the MLS deliver another really valuable core service to their members. I hope that brokers across America are going to be able to access TrustFunds soon from their local MLS. If you would like to learn more about TrustFunds or schedule a demonstration, you can contact Lynn Leegard, Co-founder and CEO at lynn trustfunds. She will be attending the CMLS conference next week if you would like to learn more.

I am the VP of Operations for Triangle MLS, Inc. I am definitly interested in learing more about your product. I will be at CMLS beginning Monday and have open time Tuesday afternoon and evening and as well as Wednesday afternoon.

Can we schedule an appointment? Five Surefire Ways to Keep Your News Releases From Being Used. Re-Inventing the Collection of Earnest Money — A Case Study by Marilyn Wilson on September 15, Regulatory Risk There is another risk that can be a problem for brokers.

The TrustFunds Solution TrustFunds has completely overhauled this ineffective earnest money process with a whole new approach. The solution offers four key advantages: Convenience Real-time status notifications Security Regulatory compliance How does it Work? The process is really simple with three easy steps: One Click from Listing Detail Page First the agent clicks on the TrustFunds Electronic Earnest Money Deposit link on the listing detail page.

Choose Designated Trust Account Holder and Send Request to Buyer Second, the agent chooses the Designated Trust Account Holder and completes the payment request. Real Time Status TrustFunds provides real-time access to the status of earnest money for all of the transactions in one easy dashboard. Payment History For every transaction there is a complete payment history that is provided putting the broker in complete regulatory compliance. What is the role of the MLS? Seamless Integration The program is really easy for MLSs to execute.

Easy Adoption The MLS pays for it as a core service to make it network-wide. Easy Set-up Typically in Minnesota the listing broker holds the earnest money.

What do Brokers Think of TrustFunds? For More Information If you would like to learn more about TrustFunds or schedule a demonstration, you can contact Lynn Leegard, Co-founder and CEO at lynn trustfunds. Cancel reply Leave a Comment.

Five Surefire Ways to Keep Your News Releases From Being Used Next post: Google Local Guides Are Great For Real Estate. Electronic Signature Security Road Map to Listing Syndication Video Marketing: The Secret to More Effective Lead Generation Broker Technology Adoption and Satisfaction Survey A Potential New Role for the MLS Agent Responsiveness Study. Sitemap Contact Newsletter WAV Group Blog Reports Services Our Company, WAV Group Login DMCA Notice Privacy Policy Terms of Service. About Us Our Team Marilyn Wilson Victor Lund Kevin Hawkins.