Marcus is purchasing a home in Kansas City and his agent includes an earnest money deposit of $5,000 in the purchase agreement. The seller accepts the contract. Under Missouri law, who is responsible for holding the earnest money deposit?
Correct Answer
B) The listing broker, who must place it in a separate trust account
Under RSMo § 339.105, the broker (typically the listing broker) is required to deposit earnest money into a separate trust account maintained by the brokerage. Missouri law strictly requires that earnest money and other client funds be kept in a trust account that is separate from the broker's operating funds. The listing broker bears responsibility for proper handling of these funds.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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