Trust Funds
What must a broker do when they receive a buyer's earnest money deposit check with instructions to hold it uncashed pending acceptance?
ADeposit it immediately in the trust account
BThey may hold the check uncashed until acceptance, but must deposit it within 3 business days of the offer being accepted, unless otherwise instructed✓ Correct
CReturn it to the buyer immediately
DGive it to the seller directly
Explanation
California allows a broker to hold an earnest money check uncashed pending offer acceptance if the buyer and the broker agree in writing. Once the offer is accepted, the check must be deposited within 3 business days unless instructed otherwise by both parties.
Related California Trust Funds Questions
- A broker's trust fund account must be reconciled:
- What is 'conversion' in the context of trust funds?
- Commingling in real estate refers to:
- A broker's trust fund records must be retained for how long after the transaction closes or the funds are disbursed?
- A broker who maintains a property management business must:
- Under California law, a DRE auditor examining a broker's trust fund records has the right to inspect those records:
- A broker receives an earnest money check made out to the seller. The buyer instructs the broker to hold the check uncashed until offer acceptance. The broker MUST:
- A broker places a client's $50,000 earnest money deposit into a money market account earning interest. The broker does NOT inform the client or credit the interest to the client. This is:
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