A Florida broker discovers that earnest money deposited by a buyer was obtained through fraudulent means. The transaction has not yet closed, but the seller is unaware of the fraud. What should the broker do?
Correct Answer
B) Immediately notify all parties and freeze the earnest money account
Correct: The broker must immediately notify all parties of the fraud and freeze the account to prevent further complications and potential liability. Why not A: Cannot continue a transaction involving fraudulent funds. Why not C: Returning fraudulent funds to the perpetrator enables the fraud. Why not D: Cannot transfer potentially fraudulent funds to an innocent party.
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A buyer in Florida wants to submit an offer but cannot provide earnest money until their CD matures in one week. The seller is motivated and wants to accept the offer immediately. What is the best course of action?
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