In NC, when both buyer and seller refuse to release earnest money held in trust following a failed transaction, the broker's appropriate action is:
Why Hold the funds until the parties resolve the dispute or a court orders disbursement Is Correct
Answer B: Hold the funds until the parties resolve the dispute or a court orders disbursement
Exam Tip: Escrow & Title
Escrow questions test the neutral third-party role and the sequence of closing events. Remember that the escrow agent acts as a dual agent for both buyer and seller and cannot advocate for either side.
Key Escrow & Title Terms in This Question
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- In North Carolina, trust account funds (earnest money) must be deposited within:Escrow & Title
- Earnest money held in a broker's trust account in NC belongs to:Escrow & Title
- In NC, a buyer who submits an offer and pays an earnest money check, but no written buyer agency agreement has been signed, has implicitly established what type of relationship?Agency
- In North Carolina, earnest money must be deposited into the broker's trust account within:Contracts
- A real estate broker in North Carolina who receives earnest money must deposit it into a trust account within:Agency
- A NC broker who deposits a client's earnest money check into their personal account instead of a trust account has committed:North Carolina License Law
- A NC broker who receives earnest money must deposit it in a trust account within 3 banking days of:North Carolina License Law
- A NC broker who disburses trust funds without authorization from the parties involved has committed:Escrow & Title
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.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
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.
Math Concepts
State-Specific Concepts
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