Broker Linda is representing the seller in a residential transaction in Rapid City, South Dakota. The buyer submits an offer, and the seller accepts. The buyer's earnest money check of $5,000 is received by Linda on a Monday. Under South Dakota trust account rules, by when must Linda deposit the earnest money into her broker's trust account?
Correct Answer
C) Within three banking days of receipt
Under SDCL 36-21A-81 through 36-21A-90, South Dakota trust account rules require that earnest money and other funds received in a real estate transaction must be deposited into the broker's trust account within three banking days of receipt. This is the specific timeline mandated by South Dakota law and is a frequently tested rule on the state exam.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
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.
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