In Alabama, earnest money deposited with a broker becomes the broker's property:
Why Never — it remains client property until distributed per contract terms Is Correct
Answer B: Never — it remains client property until distributed per contract terms
Exam Tip: Contracts
Contract questions frequently test the essential elements required for a valid contract. Remember: competent parties, mutual consent, lawful object, and sufficient consideration. Watch for void vs. voidable distinctions.
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- In Alabama, earnest money is held by the broker in a:Contracts
- A buyer and seller disagree about who is entitled to the earnest money after a contract falls through. What should the Alabama broker do?Trust Funds
- In Alabama, an earnest money deposit held by a real estate broker must be:Trust Funds
- When must an Alabama broker deposit earnest money received from a buyer into the trust account?Trust Funds
- After a real estate closing in Alabama, the broker should disburse the earnest money trust funds:Trust Funds
- In a purchase transaction in Alabama, the earnest money deposited by the buyer is typically applied at closing toward:Finance
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Key Terms to Know
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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