Improper Handling of Earnest Money Can Result in Sanctions
It seems simple enough. A contract calls for earnest money, earnest money is collected, earnest money is deposited in an escrow account, the seller is so notified and the earnest money is disbursed as addressed in the contract. But, what happens when something goes wrong? Here are five examples – from the Ohio REALTORS® – of how failure to properly handle earnest money can get you into trouble.
Indicating you have earnest money that you don’t.
Failing to deposit earnest money in the brokerage trust account (or deliver to title company, etc., as provided in the purchase contract).
Failing to make a good faith effort to collect earnest money/ failing to notify the listing agent or seller if you don’t receive it.
Failing to notify the listing agent or seller if the buyer’s earnest money check bounces.
Disbursing earnest money when a contract doesn’t close without the signed agreement of both parties or a court order.
To read details on each of these examples and other information from OR, follow the links below:
Simple steps to avoid earnest money violations (ohiorealtors.org)
HB 532: FAQ…Earnest Money (ohiorealtors.org)
Ohio REALTORS | Ohio’s Real Estate Trade Organization