Question

If a purchase agreement says to release earnest money after the inspection date, then the seller demands the money be release prior to the inspection date.
What should the broker do?

a. refuse to release the earnest money
b. tell the buyer of the situation
c. release the earnest money
d. None of these

Answer 1

Refuse to release the earnest money

Explanation:

The broker shall act under the provisions of the purchase agreement. Without the formal approbation of the customer and distributor to allocate early the earned money, the broker has two options: not disclosing anything or "interplaying."

The broker may, however, request or the seller may insist on the offer being accompanied by a certain amount of money.  

This is particularly important when the closure is due several months after the contract is signed, but in most contracts of any length the condition remains.  In order to avoid breach of the contract by the buyer, the seller sees earnest money.