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Real Estate · State License Law and Commission

What is the typical time frame for depositing earnest money into a broker's trust account after contract execution?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

Correct answer

1-3 business days (varies by state law)

  1. A 30 days
  2. B At closing only
  3. C 7 days
  4. D 1-3 business days (varies by state law)

Why this is the answer

EARNEST MONEY DEPOSIT TIMING is specified by state law and the purchase contract. Most states require deposit within: 1 business day (strict states); 2-3 business days (most common); some states specify 'promptly' which is interpreted as 1-3 business days. Holding earnest money for longer than required — even temporarily — may constitute an improper 'float' on client funds. Some purchase contracts specify the deposit timeline regardless of state minimums (e.g., 'deposit within 48 hours of contract acceptance'). The contract governs; if the contract requires deposit sooner than state law requires, the contract timeline controls for that transaction. Delayed deposit is a civil violation even when eventually corrected.
Source: Real Estate State Exam, Earnest Money Deposit Timing

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About this topic: State License Law and Commission

State license law and commission questions cover who must be licensed, exemptions, license types and renewal, continuing education, the real estate commission's powers and the grounds for discipline. This is one of 34 Salesperson (State Law) questions on state license law and commission, each with a full explanation on a single study page.

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