A Florida broker holds $15,000 in earnest money in an interest-bearing escrow account. After 90 days, the transaction closes successfully. Who is entitled to the interest earned on the earnest money?
Correct Answer
D) Whoever is designated in the purchase contract
Correct: Interest on earnest money belongs to whoever is designated in the purchase contract; if not specified, it typically goes to the depositor (buyer). Why not A: Not automatic unless specified in contract. Why not B: Seller has no automatic right to interest. Why not C: Broker cannot keep interest without written agreement.
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In Florida real estate transactions, what is the primary purpose of earnest money?
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A buyer defaults on a Florida real estate contract after all contingencies have expired. The contract specifies that earnest money will be forfeited as liquidated damages. However, the actual damages to the seller are significantly higher than the earnest money amount. Can the seller pursue additional damages beyond the earnest money?