A West Virginia listing broker receives an earnest money deposit of $8,000 from a buyer after a purchase agreement is fully executed. The buyer's agent works for a different brokerage. Under the West Virginia Real Estate License Act and Commission regulations, where must the earnest money be deposited, and by when?
Correct Answer
A) In the listing broker's escrow trust account, within three banking days of contract execution
Under the West Virginia Real Estate License Act (W. Va. Code § 30-40-1 et seq.) and WVREC regulations (W. Va. C.S.R. § 174-1-1 et seq.), earnest money received in connection with a real estate transaction must be deposited into the broker's escrow trust account within three banking days of receipt or contract execution. The listing broker, as the broker holding the funds, is responsible for proper escrow handling regardless of whether a cooperating buyer's agent is involved.
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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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