Final answer:
Earnest money is not required in Minnesota real estate transactions (A); it is a deposit showing buyer's good faith. The other statements are incorrect as the terms for earnest money, including its custody and return, are determined by the purchase agreement and again, it is not necessarily required to be in any specific form like cash.
Step-by-step explanation:
Regarding the question of which statement about earnest money in Minnesota is true, the correct answer is A. Earnest money is not required in Minnesota real estate transactions. While earnest money is common in many real estate transactions, it is not a legal requirement in Minnesota or most other states. Earnest money is a deposit made to a seller that represents a buyer's good faith to buy a home. The presence of earnest money can help in making an offer more attractive to a seller, but it must be noted that its terms are negotiable and stipulated in the purchase agreement.
Regarding the other statements: B is incorrect because while the listing broker does typically hold earnest money, it does not necessarily have to be in an interest-bearing account unless agreed upon by both parties. Statement C is also incorrect, as the forfeiture of earnest money depends on the contingencies and terms outlined in the purchase agreement. If certain conditions are not met, the buyer may have the right to recover earnest money. Lastly, D is not correct since earnest money does not have to be paid in cash. It can be a personal check, cashier's check, or sometimes even a wire transfer, subject to the terms agreed by both the buyer and seller.