What should a listing broker do if an earnest money check is found to be insufficient?

The appropriate course of action for a listing broker upon discovering that an earnest money check is insufficient is to notify the principal and wait for further instructions. This approach is essential because it maintains transparency and upholds fiduciary duties to the client.

When a broker comes across an insufficient check, they have a responsibility to communicate this issue to their client, the principal, as the earnest money is a crucial part of the transaction that demonstrates the buyer's commitment. By informing the principal, the broker allows them to make informed decisions about how to proceed—whether it’s requesting the buyer to provide a new check, addressing the issue directly with the buyer, or exploring other options.

This step not only ensures that the broker is acting in the best interests of their client, but it also protects the interests of all parties involved in the transaction, keeping the process in compliance with relevant laws and regulations. Waiting without notifying the principal could lead to misunderstandings and complications in the transaction, while taking unilateral action without consulting the principal could result in a breach of trust or contractual obligations.