A buyer submits an earnest money deposit of $5,000 with their offer on a Florida property. The contract is rejected by the seller. Under Florida law, what should happen to the earnest money?
Correct Answer
B) The earnest money is returned to the buyer immediately
Correct: When a contract is rejected, the earnest money must be returned to the buyer immediately as no valid contract exists. Why not A: The seller has no claim to earnest money when rejecting an offer. Why not C: There is no requirement to hold funds when no contract exists. Why not D: Splitting funds is not permitted without a valid contract provision.
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Previous Question
Audit memo Cedar Memo highlights this Florida rule. In a Tallahassee transaction, a closing coordinator wants the Florida rule on deposit receipt. Which statement is correct?
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A Florida real estate broker receives a $10,000 earnest money deposit. The buyer defaults on the contract after the inspection period expires. The seller demands the earnest money, but the buyer claims they should receive it back due to financing issues. What should the broker do?