70. The buyers' parents are providing a $2,000 earnest money check. The check is dependent on the client's parents' income. The buyers can usually be paid twice, and the agreement provides for return of the earnest money to the buyer. The broker should:
Answer: D
The broker should write the earnest money check, other expenses, to the buyers.
In this scenario, the broker is required to issue the $2,000 earnest money check directly to the buyers, despite the funds being dependent on the parents' income. This ensures the buyers have a vested interest in the transaction and maintains the integrity of the agreement.
A) Write a $2,000 check to the buyer.
This choice is misleading as it suggests issuing a check to a single buyer without specifying that the funds are for earnest money. The context indicates the check is to be issued to the buyers collectively, not just one party.
B) Write a $2,000 check to the buyer.
Similar to option A, this option incorrectly implies that the check should be issued to an individual buyer rather than the group of buyers involved in the transaction. The earnest money should be held in trust for the buyers as a whole.
C) Write the earnest money check, other expenses, to the parents.
This option is incorrect because the earnest money should not be issued to the parents. It is essential for the buyers to have the earnest money in their name to show commitment to the purchase agreement, which is not fulfilled by involving the parents directly in this transaction.
D) Write the earnest money check, other expenses, to the buyers.
This option is correct as it aligns with the requirement that the earnest money check should be made out to the buyers. This reinforces their engagement in the transaction and ensures that the earnest money is appropriately safeguarded.
Conclusion
Option D is the only choice that accurately reflects the necessary procedure for handling the earnest money in this real estate transaction. The other options either misattribute the check to an individual or incorrectly involve the parents, which does not meet the terms of the agreement. Thus, issuing the check to the buyers ensures proper adherence to protocol and safeguards their financial commitment.