For some buyers, coming up with a down payment and/or funds to close can be challenging. When friends or family members offer to participate, it can be helpful but there are some important do's and don'ts to be aware of:

DO:

Tell your loan officer ASAP if you will be getting gift funds. Some loan programs require a certain amount of funds to come directly from the borrower.
Talk with your tax advisor. There may be tax implications for both you and the gift-giver.
Tell ME. There are some contractual additions we should consider making to your offer to decrease your liability.
Tell your escrow officer if gift funds will be sent to escrow
Escrow will need exact amount being sent
Name of person(s) sending funds, together with their email and phone number
Third Party Deposit instructions signed by depositor and buyer - different from what the gift letter provided to the lender
If getting a loan, check with your lender how they would like funds deposit (cashier's check or wire)
Notify escrow when funds have been sent
If gift funds depositor is sending wire, wire instructions should always be verified and sent to depositor directly

DON'T:

Forward wire instructions from escrow directly to depositor - reach out to escrow to send wire instructions directly
Send funds to escrow without notifying escrow first or verifying instructions - INQUIRE BEFORE YOU WIRE

*Some of this information was provided by Ashley Duran of Chicago Title of Washington.