78. Two weeks prior to the proposed closing date, a buyer decides to purchase a different property. The buyer requests an earnest money refund. Which of the following actions should the buyer's broker take?
Answer: D
The buyer's broker should request that the listing broker sign an earnest money release agreement.
In this scenario, the appropriate action for the buyer's broker is to request that the listing broker sign an earnest money release agreement to facilitate the return of the earnest money to the buyer.
A) Inform the listing broker that the seller must return the earnest money.
This option is incorrect because simply informing the listing broker does not initiate any formal process for the return of earnest money. There must be a mutual agreement, typically formalized through an earnest money release agreement, to ensure that the seller legally agrees to return the funds.
B) Request a cancellation of the contract and return of the earnest money.
While this option sounds reasonable, it is not the best course of action. A cancellation request may not guarantee the return of earnest money unless it is accompanied by a release agreement signed by the seller, which could lead to disputes or delays.
C) Negotiate with the listing broker to divide the earnest money equitably.
This choice is incorrect as it assumes a possibility of splitting the earnest money, which may not be appropriate or acceptable to all parties involved. The buyer is entitled to the full return of their earnest money when withdrawing from the contract, not a divided amount.
D) Request that the listing broker sign an earnest money release agreement.
This option is correct because it directly addresses the need for a formal agreement that allows for the return of the earnest money. By obtaining the listing broker's signature on the release agreement, the buyer's broker ensures that the funds will be returned in accordance with the terms agreed upon by both parties.
Conclusion
The most effective and appropriate action for the buyer's broker is to request that the listing broker sign an earnest money release agreement, as it legally facilitates the return of the funds. Other options either do not address the necessary legal formalities or could potentially complicate the situation, making them less favorable choices.