Question

You, as an agent, decide to purchase a property through your office. Your earnest deposit: Select one:

a. Must be placed in your broker's trust account
b. May remain in your checking account until the closing of the transaction
c. Must be placed in neutral escrow depository in Arizona
d. Can be handled as indicated in any of the above

Answer 1

Typically, an agent's earnest deposit must be placed in the broker's trust account or an escrow account, where it is held until the transaction closes. This ensures proper handling of funds and facilitates the payment of home insurance and property taxes.

Step-by-step explanation:

When an agent decides to purchase a property through their office, the proper handling of the earnest deposit can vary depending on state laws and agency policies. However, commonly, option a. Must be placed in your broker's trust account is correct, as the deposit should be held in a neutral account managed by the broker or a designated escrow company until the transaction closes. This is to ensure that the funds are handled correctly and will be available at closing. Escrow services may include managing the funds for home insurance and property taxes, making the process more convenient for the homeowner by incorporating these into the normal monthly payment.