In Washington State, a buyer's broker receives earnest money directly from the buyer. Which of the following statements correctly describes how this earnest money must be handled under Washington DOL rules?
Correct Answer
B) The buyer's broker must deposit the earnest money into the buyer's broker's firm trust account within three banking days
Under WAC 308-124D, any earnest money received by a Washington real estate firm — whether the listing firm or the buyer's firm — must be deposited into that firm's trust account within three banking days of receipt. The buyer's broker's firm is responsible for properly safeguarding the funds in its own trust account. The parties may subsequently agree on how and when to transfer funds to escrow, but the initial deposit obligation falls on the receiving firm.
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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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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
- → In Rhode Island, a licensee submits a written purchase or lease offer to an owner. Which statement is correct?
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- → Which Rhode Island rule applies when a listing agreement lists property with a multiple listing service?
- → A Rhode Island licensee encounters a listing agreement lets the principal broker retain a portion of deposit money upon buyer default. What should the licensee remember?
- → A Hawaii licensee is reviewing the commission asks to inspect escrow and trust records. What is the best answer?
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