In Iowa, earnest money received by a broker must be deposited into:
Correct Answer
B) A broker's trust or escrow account
Under Iowa Code §543B.46 and Iowa Real Estate Commission rules, a broker who receives earnest money must deposit it into a separate trust or escrow account. This account must be maintained apart from the broker's operating funds to protect the interests of all parties. Commingling client funds with personal or business funds is a violation that can result in license suspension or revocation.
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Related Topics & Key Terms
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Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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