If a purchase agreement states to release earnest money after the inspection date, but the seller wants it released early, what should the broker do?

If a purchase agreement states to release earnest money after the inspection date, but the seller wants it released early, what should the broker do?

• A. Release the earnest money as requested
• B. Refuse to release the earnest money
• C. Contact the buyer for approval
• D. Interplead the earnings immediately

Answer: (B)

In this scenario, it's crucial to adhere to the terms of the purchase agreement, which specifically states that earnest money should not be released until after the inspection date. The brokerage has a fiduciary duty to follow these contractual obligations and protect the interests of the parties involved. Releasing the earnest money before the inspection date could expose the broker to liability if the transaction were to fall through, as it would go against the explicit terms that both the buyer and the seller agreed upon. Therefore, refusing to release the earnest money ensures compliance with the agreement. It maintains the integrity of the transaction and upholds the legal obligations the broker is bound to. This approach also safeguards the interests of the buyer, who may have contingencies tied to the inspection, allowing them to have the full opportunity to proceed or withdraw based on the inspection results. Keeping the earnest money secure until the agreed conditions are met respects the legal agreement and protects all parties involved in the transaction.

In this scenario, it's crucial to adhere to the terms of the purchase agreement, which specifically states that earnest money should not be released until after the inspection date. The brokerage has a fiduciary duty to follow these contractual obligations and protect the interests of the parties involved.

Releasing the earnest money before the inspection date could expose the broker to liability if the transaction were to fall through, as it would go against the explicit terms that both the buyer and the seller agreed upon. Therefore, refusing to release the earnest money ensures compliance with the agreement. It maintains the integrity of the transaction and upholds the legal obligations the broker is bound to.

This approach also safeguards the interests of the buyer, who may have contingencies tied to the inspection, allowing them to have the full opportunity to proceed or withdraw based on the inspection results. Keeping the earnest money secure until the agreed conditions are met respects the legal agreement and protects all parties involved in the transaction.