hard · National Real Estate Exam agency
A broker is holding an earnest money deposit for a transaction that has fallen through. Both the buyer and the seller claim they are entitled to the funds.
The broker should:
- Apply the disputed funds directly to the broker's own unpaid commission balance.
- Keep the funds until both parties sign a release or a court issues an order.
- Return the earnest money to the buyer immediately since the deal didn't close.
- Release the disputed money to the seller alone to protect the client's interest.
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