Broker Sarah receives a $5,000 earnest money deposit from buyer Johnson for a property purchase. The contract states the deposit should be held in escrow. According to Florida law, what must Sarah do with this deposit?
Correct Answer
B) Deposit it in a separate escrow account within 3 business days
Correct: Florida law requires earnest money deposits to be placed in a separate escrow account within 3 business days of receipt. Why not A: Personal accounts cannot be used for client funds. Why not C: Funds must be held in escrow, not given directly to seller. Why not D: Cash storage is not proper escrow handling.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
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A buyer and seller in Florida agree to extend the closing date by 10 days. The original contract had a 'time is of the essence' clause. What must they do to make this extension valid?
- → A Florida real estate licensee prepares a purchase agreement that includes a financing contingency. The buyer fails to apply for financing within the specified timeframe. What is the legal consequence under Florida contract law?
- → Under Florida law, all of the following would typically survive the closing of a real estate purchase agreement EXCEPT:
- → A buyer in Fort Lauderdale breaches a residential purchase contract by refusing to close without legal justification. The contract contains a liquidated damages clause equal to the earnest money deposit of $5,000. What is the seller's most likely remedy?
- → A seller in Florida fails to deliver clear title by the closing date due to an unexpected lien. The buyer wants to proceed but needs more time. What is the most appropriate course of action?
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- → In Gainesville, a buyer discovers that the seller's agent failed to disclose a material fact about flooding history. The buyer wants to cancel the contract before closing. Under Florida law, what is the buyer's strongest legal basis?
- → A 17-year-old inherits a property in Florida and wants to sell it. The minor enters into a sales contract with a buyer. Under Florida law, what is the status of this contract?
- → Audit memo Harbor Case highlights this Florida rule. In a Tallahassee transaction, a closing coordinator wants the Florida rule on offer. Which statement is correct?
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Scenario Cedar File raises this Florida point. In a Tallahassee transaction, a closing coordinator wants the Florida rule on disputed earnest money. Which statement is correct?
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A buyer makes an offer on a $450,000 home with earnest money equal to 2% of the purchase price. How much earnest money must be deposited?