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. This ensures proper handling and accountability of the funds in accordance with real estate regulations.

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

This option is incorrect because affiliate brokers are not permitted to maintain earnest-money deposits in their own escrow accounts. Such funds must be handled by the principal broker to ensure compliance with legal and regulatory standards.

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

This option is correct as it aligns with the requirement that all earnest-money deposits must be forwarded to the principal broker promptly. This practice protects both the buyer's interests and the integrity of the transaction.

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

This option is incorrect because holding earnest-money deposits for any duration by an affiliate broker is not allowed. The funds must be sent to the principal broker immediately to maintain transparency and proper management.

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

This option is incorrect as it implies that the buyer should handle the transmission of the deposit, which is not appropriate. The responsibility lies with the affiliate broker to ensure that the deposit is delivered directly to the principal broker.

Conclusion

The requirement for affiliate brokers to transmit earnest-money deposits to the principal broker immediately after receipt is crucial for maintaining compliance with real estate regulations. Other options either misrepresent the handling of these funds or suggest practices that could lead to mismanagement or delays. Thus, option B is the only correct and responsible choice.