In Ohio, a broker must deposit earnest money within:
Audio Lesson
Duration: 2:24
Question & Answer
Review the question and all answer choices
24 hours
24 hours is too short a timeframe and exceeds Ohio's requirements. Many states don't specify such a short period, and this misconception likely comes from confusing earnest money deposit rules with other real estate transaction deadlines.
2 business days of acceptance
5 business days
5 business days exceeds Ohio's requirement. While some states might have longer timeframes, Ohio specifically mandates 2 business days, making this option incorrect.
As specified in the contract
While contracts may specify deposit terms, Ohio law establishes a minimum requirement of 2 business days that must be followed regardless of contract language. State law supersedes contractual provisions in this case.
Why is this correct?
Ohio law specifically requires brokers to deposit earnest money into their trust account within 2 business days of contract acceptance. This statutory timeframe supersedes any contractual language that might suggest a different period, making B the correct answer.
Deep Analysis
AI-powered in-depth explanation of this concept
Understanding earnest money deposit timelines is crucial in real estate practice because it directly impacts transaction compliance and potential legal issues. Brokers handle client funds, and mishandling earnest money can result in serious consequences including license suspension or fines. This question tests knowledge of Ohio's specific regulatory requirements for fund handling. The core concept is the statutory timeframe for depositing earnest money into a broker's trust account. The reasoning process involves recognizing that while contracts may specify terms, state law establishes minimum requirements. Option B correctly identifies Ohio's 2-business-day mandate from contract acceptance. This question challenges students because it requires distinguishing between contractual terms and statutory requirements—a common exam pattern. It connects to broader knowledge of real estate escrow procedures, trust account management, and state-specific regulations that govern real estate practice.
Knowledge Background
Essential context and foundational knowledge
Earnest money serves as evidence of a buyer's good faith in a real estate transaction and is held in trust by the broker until closing. Most states have specific regulations governing how quickly brokers must deposit these funds into their trust accounts. These requirements exist to protect consumers and ensure proper handling of client funds. Ohio's 2-business-day rule from contract acceptance provides brokers with a reasonable timeframe while preventing funds from being held outside the required trust account for extended periods. This regulation is part of Ohio's broader real estate license law that governs broker conduct and trust account management.
Two business days, that's the rule, from acceptance, don't be a fool
Recite this rhyme when encountering Ohio earnest money deposit questions to remember the 2-business-day timeframe starting from contract acceptance
For Ohio earnest money questions, remember the '2-business-day rule' from contract acceptance. If you see a question about Ohio-specific deposit timelines, this is likely the correct answer.
Real World Application
How this concept applies in actual real estate practice
Sarah, an Ohio real estate agent, just received signed purchase agreements on two properties. On Monday, both contracts were accepted by sellers. The first buyer gave their earnest money to Sarah immediately upon signing, while the second buyer provided their earnest money on Wednesday. Sarah must deposit both funds into her trust account by the close of business on Thursday (two business days after Monday's acceptance), even though she didn't receive the second funds until Wednesday. Failure to do so could result in disciplinary action by the Ohio Division of Real Estate.
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