State Laws Earnest Money/Escrow/Trust Account True/False Flashcards
Broker receives an offer with the correct earnest money & the usual escrow clause, but lower than asking price. Broker should deposit the earnest money in a non-interest bearing escrow account & present the offer to the seller.
True
When there is a disagreement about binder or earnest money, Broker may return it to the buyer.
False
In the event of a disagreement over trust funds, parties may seek arbitration or mediation.
True
Earnest money accepted by the sales associate must be deposited by the associate within 72 business hours.
False:
Sales associate must give to broker
Earnest money given to the sales associate must be delivered to the broker immediately.
True:
Defined as by the next business day
Sales associate may accept deposits on behalf of Broker if the check is payable to broker & broker has given express consent
True
Broker faced with conflicting demands may NOT return the check to buyer.
True
Binder money is evidence of a buyer’s good faith.
True
A promissory note is legal tender that can be deposited into an escrow account.
False:
It is not legal tender
Sales associate receives a promissory note as binder money. Sales associate should reject the note because only deposit-able items may be accepted as binder money.
False:
Anything can be accepted
Sales associate must deliver binder money, both deposit-able & non-deposit-able, to broker immediately.
True
Broker must deposit binder money into a non interest bearing trust account immediately.
True:
Immediately is within 3 business days of receipt by sales associate
An earnest money check is received by sales associate on Monday morning. The offer is accepted Tuesday. the check is given to Broker Thursday. The sales associate’s license may be revoked or suspended.
True
