Question 73

Earnest-money deposits should be transmitted to the principal broker immediately after receipt.

Earnest-money deposits received by an affiliate broker must be transmitted to the principal broker without delay to ensure proper handling and compliance with legal and ethical standards in real estate transactions.

A) may be kept temporarily in an escrow account opened by the affiliate broker

This option is incorrect because earnest-money deposits should not be kept in an escrow account managed by the affiliate broker. The funds must be handled by the principal broker to maintain accountability and compliance with regulations.

B) should be transmitted to the principal broker immediately after receipt

This option is correct, as it aligns with the requirement that earnest-money deposits must be promptly sent to the principal broker. This ensures that the funds are managed properly and that all parties involved in the transaction are protected.

C) may be held by the affiliate broker for 3 business days

This option is incorrect. There is no provision allowing the affiliate broker to hold earnest-money deposits for an extended period. Timely transmission to the principal broker is mandated to avoid any potential issues regarding the handling of client funds.

D) should be returned to the buyer to transmit to the broker

This option is incorrect as it suggests that the buyer should handle the deposit, which is not standard practice. The responsibility lies with the affiliate broker to pass the deposit directly to the principal broker to ensure proper management and documentation.

Conclusion

The requirement for earnest-money deposits to be transmitted to the principal broker immediately after receipt is crucial for maintaining the integrity of the real estate transaction process. Options A, C, and D fail to comply with this necessary practice, emphasizing the importance of proper fund management in real estate. Therefore, option B is definitively the correct choice.