A Virginia licensee is holding $5,000 in earnest money in her broker's escrow account. The transaction falls through and both the buyer and seller agree in writing that the buyer should receive the full refund. What should the licensee's broker do?
Correct Answer
D) Release the funds to the buyer promptly in accordance with the written mutual agreement of the parties.
Under 18 VAC 135-20-180, when all parties to a transaction provide written mutual agreement on the disposition of escrow funds, the broker must release the funds in accordance with that agreement. Since both the buyer and seller have agreed in writing that the buyer should receive the refund, the broker should release the funds to the buyer promptly. There is no dispute requiring further action.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
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.
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