A buyer in Reno submits an offer on a property and includes earnest money of $5,000. The seller's agent receives the earnest money check. Under Nevada law, where must the earnest money be deposited?
Correct Answer
A) In the broker's trust account, held separately from the broker's operating funds
Under NRS 645.310 and NAC Chapter 645, a Nevada real estate broker who receives earnest money or any other funds belonging to others must deposit those funds into a separate trust account. The trust account must be maintained separately from the broker's own operating or personal funds to protect client money.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
A financing contingency makes the purchase contract conditional upon the buyer obtaining mortgage approval within a specified time period. If the buyer cannot secure financing, they can cancel the contract and receive their earnest money back.
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