Question

TBH Realty Company is handling the sale of the Lopez (seller) home to the Bright (buyer) family. The buyers give an earnest money deposit to the brokerage in the amount of $5,000. The money is then deposited into the broker's account at the bank on the seventh business day after receiving the funds. Has TBH Realty Company followed all trust account regulations with the earnest money?

a. Yes, the money was received and deposited into the broker's account by the seventh business day after receiving the funds.
b. No, the broker should have deposited the earnest money into the broker's account within three business days of receiving the funds.
c. No, not only should the broker have deposited the earnest money within three business days of receipt of the funds, the money was to have been deposited into the broker's trust fund not the broker's account.
d. No, the broker should have deposited the earnest money into the broker's trust fund not the broker's account within the seven days allotted after receipt of funds.

Answer 1

No, the broker should have deposited the earnest money into the broker's trust fund not the broker's account within the seven days allotted after receipt of funds.

Step-by-step explanation:

No, the broker should have deposited the earnest money into the broker's trust fund not the broker's account within the seven days allotted after receipt of funds. According to the question, the earnest money deposit was given to the brokerage by the buyers. The brokerage is then responsible for depositing the funds into a trust account, separate from their own personal or business account, within three business days. The purpose of a trust account is to protect the funds and ensure they are used appropriately for the intended purpose, in this case, towards the sale of the property.