A prospective buyer gave their broker a personal check for $1,000 payable to the seller along with an offer to buy the property. The buyer told the broker the check was not to be cashed until the end of the month. Which of the following is correct?
Correct Answer
D) The broker may hold the check, but needs to tell the seller it is being held uncashed before the seller accepts the offer.
California DRE regulations require that when a buyer instructs a broker to hold a check uncashed, the broker may comply with that instruction, but must disclose to the seller — before the seller accepts the offer — that the check is being held and has not been deposited. This disclosure is mandatory because the seller's decision to accept the offer may be influenced by the liquidity or reliability of the deposit, and concealing the uncashed status of the check would be a material misrepresentation to the seller.
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