Escrow Policy for Maryland and West Virginia Contracts

Effective Date

October 31 – Redwood will stop collecting Earnest Money Deposits (EMD) for Maryland and West Virginia transactions.

• Agents must have the Title Company hold the EMD.
• Virginia and DC policies remain the same, though Title Company use is encouraged.

Policy Overview

Redwood will no longer hold escrow in MD and WV, aligning with current practices in PA. Escrow will now be managed by Title Companies to reduce liability, avoid compliance risks, and prevent client misunderstandings.

Key Reasons for the Change

• Liability Risks: Late deposits create compliance exposure, especially in WV where funds must be deposited immediately.
• Strict WV Rules: Spot audits, limited account access, and rigid reconciliation requirements increase risk for brokers.
• Client Misunderstandings: Buyers often believe brokerages can release deposits unilaterally, which is not accurate.
• Conflict Resolution: Disputes are best handled by Title Companies or attorneys, not brokerages.

Agent Action Steps

• For MD and WV transactions after Oct. 31, always have the Title Company hold EMD.
• In VA and DC, continue current process but use Title Companies when possible.
• Communicate clearly with clients about how deposits will be handled.