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Real Estate · Trust Account Management

What is the general rule on how quickly a broker must deposit trust funds such as earnest money?

Correct answer

Within the short time frame set by state law — often a small number of business days after receipt or acceptance — into the brokerage trust account

  1. A Whenever convenient, with no deadline
  2. B Within the short time frame set by state law — often a small number of business days after receipt or acceptance — into the brokerage trust account
  3. C Only at the end of the month
  4. D After closing only

Why this is the answer

States set deadlines requiring a broker to deposit trust funds, such as earnest money, into the brokerage trust (escrow) account promptly — frequently within a small number of business days after the broker receives the funds or after the contract is accepted, depending on the state. Holding funds beyond the deadline, depositing them late, or keeping them in a non-trust account are violations. The exact number of days and the trigger (receipt versus acceptance) vary by state, so brokers must know their own rule, but the principle that trust funds must be deposited quickly into a proper trust account, not held or delayed, is consistent across the state broker portion.
Source: Trust Account Deposit Timing

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A brokerage receives a $5,000 earnest money check from a buyer. Under most state laws, by when must the broker deposit the check into the trust account?

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