ContractsEarnest_money_and_escrowMEDIUM
A broker holds earnest money and both the buyer and seller claim it after a failed transaction. Neither party will agree to release. What should the broker do?
Correct Answer
B) File an interpleader action and let the court decide
When both parties claim the earnest money and cannot agree, the broker should file an interpleader action to deposit the funds with the court and let the court determine who is entitled.
Answer Options
A
Give the money to the seller because the seller listed the propertyB
File an interpleader action and let the court decideC
Give the money to the buyer because the buyer deposited itD
Keep the money as a commissionWhy This Is the Correct Answer
Sign up free to unlock full analysis
Why the Other Options Are Wrong
Sign up free to unlock full analysis
Deep Analysis of This Contracts Question
Sign up free to unlock full analysis
Background Knowledge for Contracts
Sign up free to unlock full analysis
Sign up free to unlock full analysis
Real World Application in Contracts
Sign up free to unlock full analysis
Common Mistakes to Avoid on Contracts Questions
Sign up free to unlock full analysis
Related Topics & Key Terms
Key Terms:
earnest_money_and_escrowcontractsinterpleaderdispute
Was this explanation helpful?
More Contracts Questions
Under Indiana's Statute of Frauds, real estate contracts must be:
In June 2026, Riley Monroe receives a counteroffer and asks what generally happens to the original offer. What is the most accurate answer under current Illinois rules?
Earnest money (down payment) in NY is typically held by:
A contract formed for an illegal purpose is considered:
Specific performance in North Dakota:
- → In a real estate contract, liquidated damages refers to damages that are:
- → Sawyer Iverson is reviewing an Illinois issue in Joliet. The person assumes that attorney review automatically replaces every inspection, appraisal, or financing deadline in a standard Illinois residential contract. Which statement best applies?
- → Avery Jenkins is reviewing an Illinois issue in Normal. The person asks what happens if neither attorney sends a disapproval or proposed change during the standard review period. Which statement best applies?
- → Which statement best describes the significance of flood zone disclosure in Arkansas real estate transactions?
- → Liquidated damages in a real estate contract refer to:
- → Earnest money in West Virginia must be:
- → A bilateral contract in real estate is best described as:
- → A contract where one party uses threats to force the other party to sign is considered:
- → Washington's standard real estate forms are provided by:
- → In Massachusetts, the purchase and sale agreement is typically signed: