Contracts
In Massachusetts, 'earnest money' deposited with a broker should be held in:
AThe broker's personal bank account
BThe broker's general operating account
CA separate escrow (trust) account✓ Correct
DA money market fund in the broker's name
Explanation
Massachusetts regulations require brokers to maintain a separate escrow (trust) account for holding client funds such as earnest money deposits, keeping them separate from the broker's own funds.
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Key Terms to Know
Earnest Money
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.
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.
Math Concepts
State-Specific Concepts
Escrow Disputes
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