TrustFunds delivers banking industry payment technology and applies it to the earnest money payment process in real estate transactions.
Automated Clearing House (ACH) is a payment network that allows electronic submission of payments by directly withdrawing a designated amount of money from a savings or checking account and depositing it into another banking account. *Annually in the United States, over 24 billion electronic transactions move $41 trillion from bank to bank using the ACH network for things like direct deposit, government benefits and bill payments such as utility and mortgage payments. Here are five key reasons why it is so popular:
- ACH payments are less cumbersome than dealing with paper checks.
- ACH payments are usually faster to clear and much more reliable than paper checks.
- Paper checks can bounce up to three weeks after they are submitted, but ACH payments are withdrawn directly from the buyer’s account. This means the buyer and the seller both know the status of the transaction faster if an ACH payment is used vs. a paper check.
- Because ACH is electronic, there is less room for error than in paper checks which require passing along and relying on hand-written information.
- ACH transactions can be fully tracked, letting users know where their money is at each step in the transaction.
Traditionally, when submitting earnest money, the home buyer turns over a paper check to either their real estate agent for delivery or directly to the broker or title company to deposit the check into its trust account. This process can take days and through it all, the paper check changes hands many times making it difficult or impossible to track. Furthermore, the confidential information on the paper check is being shared with many parties.
By using TrustFunds, all of the guess work of passing around a paper check for the earnest money can be eliminated. Instead, the buyer can submit their earnest money, using their bank routing and account number, directly online through a link provided by their real estate agent. Once the transaction is approved, both the buyer and the agent receive confirmation emails. Both listing agent and the buyer’s agent also have access to a receipt and a deposit verification at any time.
Making the earnest money payment electronic by using ACH simplifies the real estate buying process and takes stress away from the buyers, the sellers and the agents.