Contracts
In Rhode Island, 'earnest money' is typically held by whom after a purchase agreement is signed?
AThe buyer's lender
BThe listing broker or the closing attorney in a separate escrow account✓ Correct
CThe seller directly
DThe Rhode Island DBR
Explanation
In Rhode Island, earnest money is typically held in an escrow account by the listing broker or the closing attorney, separate from personal or business funds, until closing or disposition of the contract.
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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.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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