A buyer's earnest money is being held by the listing broker. The transaction falls through and there is a dispute about who is entitled to the funds. What should the broker do?
Why Continue to hold the funds in trust until both parties agree on the disbursement, or interplead the funds with the court Is Correct
Answer C: Continue to hold the funds in trust until both parties agree on the disbursement, or interplead the funds with the court
Exam Tip: Trust Funds
Trust fund questions test the rules for handling client money. Know the deadlines for depositing trust funds, what constitutes commingling vs. conversion, and the penalties for violations.
Key Trust Funds Terms in This Question
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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.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Listing AgreementA contract between a property owner and a real estate broker that authorizes the broker to market and sell the property.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
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