What happens to earnest money if a contract has been accepted?

What happens to earnest money if a contract has been accepted?

• A. It can be held indefinitely
• B. Must be deposited within three banking days
• C. Can be used for other expenses
• D. Must be refunded immediately

Answer: (B)

When a contract has been accepted, earnest money must be deposited into a designated escrow account within three banking days. This requirement ensures that the earnest money is safely held until the transaction is completed or otherwise resolved. The timely deposit serves multiple purposes: it demonstrates the buyer's seriousness about the transaction, provides assurance to the seller, and ensures proper handling of funds according to the rules governing real estate transactions in North Carolina. Holding earnest money indefinitely is not permissible, as it needs to be accounted for in accordance with regulations. Using the earnest money for other expenses or refunding it immediately also does not align with proper procedures related to earnest money. The focus is on the security and proper management of those funds during the course of the transaction, reinforcing the importance of adhering to established timelines and processes.

When a contract has been accepted, earnest money must be deposited into a designated escrow account within three banking days. This requirement ensures that the earnest money is safely held until the transaction is completed or otherwise resolved. The timely deposit serves multiple purposes: it demonstrates the buyer's seriousness about the transaction, provides assurance to the seller, and ensures proper handling of funds according to the rules governing real estate transactions in North Carolina.

Holding earnest money indefinitely is not permissible, as it needs to be accounted for in accordance with regulations. Using the earnest money for other expenses or refunding it immediately also does not align with proper procedures related to earnest money. The focus is on the security and proper management of those funds during the course of the transaction, reinforcing the importance of adhering to established timelines and processes.