Question

What happens to Katherine's earnest money when the seller accepts her offer on Wednesday?

A) It remains with Katherine until the closing of the deal.
B) It is refunded to Katherine immediately.
C) It becomes the property of the seller.
D) It is held in escrow until the closing of the deal.

Answer 1

Katherine's earnest money is held in escrow until the closing of the deal when the seller accepts her offer.

Step-by-step explanation:

When Katherine's offer is accepted by the seller on Wednesday, her earnest money is typically held in escrow until the closing of the deal. Escrow is a neutral third party that holds the money and ensures that both parties fulfill their obligations according to the terms of the deal. This protects both the buyer and the seller, as the money is held safely and will be disbursed based on the agreed-upon conditions.