A buyer in Racine submits a Wisconsin WB-11 Offer to Purchase with a $5,000 earnest money deposit. The offer is accepted by the seller on Monday. Under Wisconsin Administrative Code REEB 16, by when must the listing broker deposit the earnest money into the trust account?
Correct Answer
B) Within 2 business days of receiving the earnest money
Under Wisconsin Administrative Code REEB 16, a broker who receives trust funds (including earnest money) must deposit those funds into a trust account within 2 business days of receipt. This timeline applies from when the broker actually receives the funds, not from when the offer is accepted. The 2-business-day rule is a firm requirement designed to protect client funds from commingling or misuse.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Liquidated damages are a predetermined amount of money specified in the contract that the non-breaching party is entitled to receive if the other party breaches. In real estate, the earnest money deposit typically serves as liquidated damages.
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
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.
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