What must a broker do when they receive a buyer's earnest money deposit check with instructions to hold it uncashed pending acceptance?
Why They may hold the check uncashed until acceptance, but must deposit it within 3 business days of the offer being accepted, unless otherwise instructed Is Correct
Answer B: They may hold the check uncashed until acceptance, but must deposit it within 3 business days of the offer being accepted, unless otherwise instructed
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.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
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