Escrow Accounts
A broker does not have to wait until the third business day to deposit the funds. The broker can make the deposit earlier. The broker can also receive the deposit directly without the sales associates involvement. The same rule applies in this case. The broker still only has until the end of the third business day to deposit.
•Typically, when a buyer makes an offer on real property, the buyer includes with the offer a deposit to show good faith that the buyer is serious about purchasing the property. The deposit is placed in a escrow account by the broker.
-Deposit - money delivered to a licensee in connection with a real estate transaction
-Escrow (trust) account - an account for the deposit of money the broker holds in trust for others -Earnest money
deposit can be cash or anything that can be converted into money.•Immediately defined - Sales Associates who receive a binder deposit from a customer or principal must deliver it to their broker-employer immediately -which means no later than the end of the next business day.
•Brokers must place trust funds into an escrow account immediately -Which means no later than the third business day after the sales associate has received it.
·The three-business-day time period coincides with the day that the sales associate must turn over the deposit to the broker.
For Example: •Assume a sales associate receives a deposit from a prospective buyer on Tuesday (no legal holidays involved) Remember, the sales associate has until the end of the next business day (Wednesday) to deliver the deposit to the broker.
The broker has until the end of the third business day (Friday) to deposit the funds.
The three-business-day time period for the broker to deposit the funds begins on the day the sales associate is required to deliver the funds to the broker. (end of next business day)The first day of the three-business-day period began Wednesday
This information is courtesy of Rowlett Real Estate School and Captain Wayne Rowlett. Feel free to visit our website at www.rowlettrealestateschool.comand check out our online courses and traditional classroom training. We provide real estate courses online for most every state and classroom training in Panama City Beach, Florida and in Destin Florida.
For more information, contact Captain Wayne Rowlett at 850-547-1333
P.Stone, RRES
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