Unit 8 Flashcards
What forms can an earnest money deposit take?
Personal checks, cashier’s checks, money orders, cash, or any other forms of legal tender.
What type of account must an escrow account be and where must it be maintained?
An escrow account must be non-interest bearing and must be maintained at a federally-insured depository.
In most cases, when must earnest money be deposited?
By the next business day after contract acceptance.
When a transaction has consummated or terminated, when and how must the sponsoring broker disburse the funds?
The sponsoring broker must disburse the funds according to the terms of the contract. They must make the disbursement no earlier than the day the transaction is consummated or terminated and not later than the next business day after the transaction is consummated or terminated, unless the broker has received other written direction from all principals to the transaction or their duly authorized agents.
What is a master escrow account log?
A log identifying all escrow bank account numbers and the name and address of the bank where the escrow accounts are located.
What does a journal show?
The chronological sequence in which funds are received and disbursed by the broker.
In most cases, for how long does the broker need to keep escrow records?
Three to five years
What should a broker do if escrow records are stolen, lost, or destroyed?
Report the loss to their state licensing agency and then obtain copies of monthly bank statements, deposit and disbursement receipts, and any other available records, so they can reconstruct the lost escrow records.
______ also known as trust account money, is a deposit, usually made in the form of a check, to show evidence of the buyer’s intention to carry out the terms of the contract in good faith.
Earnest money,
Sponsoring brokers responsible for earnest money must establish an _____
escrow account.
The sponsoring broker must reconcile each escrow account that they maintain, ________ after they receive the monthly bank statement.
within a specified number of days
A sponsoring broker must keep all escrow records for _____ (as designated by that particular state’s laws).
3-5 years
Brokers who are responsible for earnest money deposits for property sales (and security deposits for leases)
Must open special trust (or escrow) accounts in which to deposit the funds they have been given.
Who holds the escrow money when a dispute occurs?
The sponsoring broker
All licensees should give earnest money checks to their sponsoring broker immediately who must deposit said earnest money by
The next business day of contract acceptance.
