Earnest Money and Escrow

Question 1

Earnest Money

Answer 1

A deposit of money that demonstrates a buyer’s commitment to a real estate transaction

Question 2

Earnest Money Acceptance (by broker)

Answer 2

Earnest money must be sent immediately to Broker with signed, written consent of the real estate owner

Question 3

Earnest Money in Dispute

Answer 3

In case of dispute, Broker must keep Earnest money in escrow UNTIL all parties grant written consent to release OR one party files and succeeds in a lawsuit

Question 4

Escrow Account

Answer 4

A bank account managed by a neutral 3rd party. Earnest money is deposited here. Must be kept separate from personal funds except those necessary to keep the bank account functioning.

Question 5

Alternative Release Exception for Earnest Money

Answer 5

Broker may release Earnest Money without consent NOR Commission discipline if the following conditions are met:

There is no lawsuit
60 days pass since dispute documentation
Broker believes a party has not acted in good faith on contract
Broker provides both parties 15 days notification before dispersing funds
Broker WAITS 15 days before dispersing funds