If an accepted offer does not close, what is true regarding the disbursement of earnest funds?

In situations where an accepted offer does not close, the handling of earnest funds is guided by established regulations to ensure proper accountability and fairness. The choice indicating that the broker may not disperse earnest funds from the trust account to pay for expenses is accurate because earnest money is held in a fiduciary capacity. This means that the broker has a legal obligation to manage these funds with care and integrity, strictly adhering to the terms outlined in the purchase agreement and state laws.

When a transaction does not finalize, the funds are typically retained in the trust account until both parties (the buyer and the seller) agree on the disbursement. This is important to protect the interests of both parties, as releasing funds prematurely or inappropriately can lead to disputes and legal challenges. Therefore, the broker's responsibility is to maintain the integrity of the earnest money, which cannot be used for any expenses or retained beyond what has been contractually agreed upon and legally justified.

By prohibiting the broker from dispersing the earnest funds for expenses, this rule serves to protect both buyers and sellers in real estate transactions, ensuring that funds are handled in accordance with agreements and preventing unauthorized use of earnest money.