Question

Broker B received a buyer’s earnest money check for $5,000 and immediately cashed it. At closing, the broker handed the seller a personal check drawn on the broker’s own bank account for $5300, representing the original earnest money plus six percent interest.The broker:____________.

Answer 1

Answer:

Should have deposited the money in a bank escrow or trust account and should have discussed the interest with the parties

Explanation:

In the case when the broker b received the money check i.e. earned for $5,000 and it is instantly cash. At the closing, the broker has drawn from this own account for $5300 that shows the original money plus siz percent rate of interst

So here the broker should deposit the money in the trust account and the same is to be discussed with the parties with respect to the interest