SU # 54__Earnest Money and Escrow Flashcards
What forms can an earnest money deposit take?
Personal checks, cashier’s checks, money orders, cash, or any other forms of legal tender
What type of account must an escrow account be and where must it be maintained?
An escrow account must be non-interest bearing and must be maintained at a federally-insured depository.
When must earnest money be deposited?
By the next business day of contract acceptance.
When a transaction has consummated or terminated, when and how must the sponsoring broker disburse the funds?
The sponsoring broker must disburse the funds according to the terms of the contract. He or she must make the disbursement no earlier than the day the transaction is consummated or terminated and not later than the next business day after the transaction is consummated or terminated, unless the broker has received other written direction from all principals to the transaction or their duly authorized agents.
What is the Master Escrow Account Log?
A log identifying all escrow bank account numbers and the name and address of the bank where the escrow accounts are located.
In addition to the Master Escrow Account Log, what other records is a sponsoring broker required to keep?
A journal, a ledger, and monthly reconciliation statements
What must a broker do if escrow records are stolen, lost, or destroyed?
The sponsoring broker must report the loss to the Division within 30 days and must also immediately obtain copies of monthly bank statements, deposit and disbursement receipts, and any other available records, so he or she can reconstruct the lost escrow records.
Where must branch offices maintain their escrow records?
Branch offices may choose to maintain their own escrow accounts in house. Or a branch office may choose to transmit all escrow moneys it receives to the main office. (They cannot however, choose to transmit to another branch office.)
If any dispute between the parties arises regarding the deposited escrow money, the sponsoring broker should _________.
Always refund the money to the first party who formally request the return of the funds.
Split the monies in thirds, one third to the buyers, one third to the sellers, and one third to the sponsoring broker.
Place the monies in an escrow account titled “Contested Escrow Funds Fiduciary Account” (CEFFA) which must be non-interest bearing.
Not release the money without a written release from both parties or both parties’ duly authorized agents (power of attorney or attorney at law).
Not release the money without a written release from both parties or both parties’ duly authorized agents (power of attorney or attorney at law).
A sponsoring broker must keep all escrow records for ________.
3 years.
5 years.
7 years.
10 years.
5 years.
Broker John received three earnest money checks on Friday. The upcoming Monday is a holiday. When is Broker John required to make an escrow deposit?
Within 5 business days.
When Broker John has received at least 5 escrow deposits.
Tuesday
By the close of business on Friday.
Tuesday
All licensees should IMMEDIATELY give earnest money checks to their sponsoring broker who MUST deposit said earnest money by
The third day following the contract acceptance.
The next business day after contract acceptance.
Within seventy four hours from the time the offer is delivered.
The third day following the final counteroffer.
The next business day after contract acceptance.
How much time is allowed to produce escrow records when a request is made by the Illinois Division of Professional Regulations?
2 weeks
2 business days
36 hours
24 hours
24 hours
When a broker makes a change to an escrow account, what action must be taken?
Broker must inform the county Clerk of the change.
Broker must tell all pending transaction holders of the change.
Broker must submit the change to the Real Estate Division of IDFPR.
Broker must inform all office licensees of the change.
Broker must submit the change to the Real Estate Division of IDFPR.
James a property manager must maintain all security deposits in an escrow account for the duration of the lease, unless the _______.
Tenant indicates to James that he/she waives the requirement.
James the broker has less than five property management lease contracts.
Lease is for less than three years.
Tenant waives this requirement in writing. If such a waiver is included in the lease, it must be in bold print.
Tenant waives this requirement in writing. If such a waiver is included in the lease, it must be in bold print.
