How to Properly Handle Earnest Money Deposit in Real Estate Transactions

Explanation:

When handling earnest money deposits in real estate transactions, it is crucial to follow the proper procedures to ensure compliance with regulations and to protect the parties involved.

Suzette's Actions: Suzette deposited the McColls' earnest money in the broker's trust fund account as directed, which is a correct step in the process. Additionally, she deposited the check within three business days of receipt, meeting the timeframe requirements.

Proper Procedure: It is essential to note that unless there were written instructions to hold the check until acceptance of the offer, the check may be cashed. However, if a check is used as an earnest money deposit, it is typically to be held until acceptance of the offer. The seller must also be informed that the buyer's check is being held and not negotiated.

Therefore, in this scenario, Suzette followed the correct procedure by depositing the earnest money in the broker's trust fund account but could have improved by confirming the specific instructions regarding holding or cashing the check with the parties involved.