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Earnnest, a software company that offers mobile and browser applications for conducting and securing real estate fees and deposits, is evolving its feature suite to include what it’s calling, “Earnnest Escrow Services,” allowing it to further reduce friction and risk when buying and selling homes, Inman has learned in a press release.
The new service, available to date only in Massachusetts where Earnnest has secured a brokerage license, is designed to alleviate the cost, management demands and, above all else, legal risk of holding deposits in escrow. The company is looking to rapidly expand the list of states in which it can operate.
“Earnnest has always been committed to making real estate transactions smoother, safer and more efficient for all parties involved,” said Russell Smith, president & COO of Earnnest, in a statement. “With Earnnest Escrow Services, we are taking this commitment to a whole new level, revolutionizing the way real estate companies handle escrow funds and providing an even better client experience.”
Earnnest partnered with alternative brokerage brand Side to best-test the new product’s rollout. Side helps independent brokerages create and sustain a local, nimble presence while functioning behind the scenes in a more traditional fashion.
“Working with Earnnest to provide escrow services to our Massachusetts partners has been a wonderful experience,” said Jeff Boos, director of brokerage operations and services at Side. “Just as Side is streamlining brokerage, Earnnest is streamlining escrow, making it far less burdensome for brokerages to integrate their own escrow offering.”
Escrow funds are often the source of contention when transaction deadlines aren’t met or a deal goes sideways in some form, a not-at-all-uncommon occurrence. Escrow account fraud is a consistent industry risk, whether or not it’s intentional.
The company stated in the press release that it has processed “over 350,000 digital earnest money deposits, totaling over $2 billion” without recording a single instance of payment fraud.
Earnnest was reviewed by Inman in 2019, noted for offering a novel, modern approach to the necessary, but long-unchanged, legacy real estate process of securing funds sent by a buyer.
“A tokenized text and email alert is sent to pull in the buyer, who is also two-factor authenticated and verified by a third-party provider, Plaid, which develops and publishes APIs specifically for use in banking, ID verification, and other industries dependent on user and data privacy,” the review stated. “Buyers can link accounts from up to 12,000 banks across the country using their existing personal login information, and even link the specific account to the Earrnest workflow.”
DepositLink, too, offers the industry an avenue for secure funds transfer at each step of the transaction, including escrow, as does Bank Shot. AsterKey is a fintech app with industry overlap that allows users to securely verify and create proof-of-funds documentation. Both apps, along with Earnnest and others, demonstrate that consumer-level trends in digital finance are creeping into residential real estate sales. It’s not unreasonable to suggest that once the movement of money becomes faster, the rest of the deal will follow.