Broker Nora receives a wire transfer of $25,000 as a buyer's earnest money deposit on a Monday morning. The purchase contract states that the earnest money will be held in escrow by the settlement company, not by the listing broker. Nora immediately wires the funds to the settlement company's escrow account the same day. Under Maryland trust account regulations, Nora's handling of these funds is:
Correct Answer
D) Permissible, because the contract designated the settlement company as the escrow holder and Nora transferred the funds as directed
Under Maryland trust account regulations, when a contract specifically designates a third party (such as a settlement company or attorney) as the escrow holder, the broker may transfer funds directly to that designated escrow holder without first depositing them into the broker's own trust account. Nora's immediate transfer of the funds to the settlement company as directed by the contract terms is permissible under COMAR 09.11.03.04, provided the transfer is documented and the designated escrow holder is an appropriate party.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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Florida real estate licenses must be renewed biennially, and sales associates have specific post-license education requirements for their first renewal.
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