Question

Based on the Exclusive Right To Sell Listing Contract, if the buyer is in default and forfeits the earnest money, who does the earnest money belong to?

1) The earnest money belongs to the buyer
2) The earnest money is split between the seller and broker
3) The earnest money belongs to the seller
4) The earnest money return is negotiated by checking the box on the contract in Forfeiture of Payments

Answer 1

The answer is 3)The earnest money belongs to the seller.

Step-by-step explanation:

The correct answer is option 3) The earnest money belongs to the seller.

According to the Exclusive Right To Sell Listing Contract, if the buyer is in default and forfeits the earnest money, it belongs to the seller. The earnest money serves as a form of compensation for the seller in case the buyer fails to fulfill their obligations.

This ensures that the seller is protected in case the buyer defaults on the agreement. It is important to read and understand the terms of the contract to know how the earnest money will be handled and who it belongs to in different scenarios.