If a buyer rescinds an accepted offer after receiving condominium documents, what should the firm do regarding earnest money?

If a buyer rescinds an accepted offer after receiving condominium documents, what should the firm do regarding earnest money?

• A. Hold the earnest money until further notice
• B. Disburse the earnest money to the seller immediately
• C. Disburse the earnest money to the buyer after notifying both parties
• D. Refund the earnest money in a month

Answer: (C)

When a buyer rescinds an accepted offer after reviewing condominium documents, the appropriate action for the firm is to disburse the earnest money to the buyer after notifying both parties. This is grounded in the principle that if a buyer decides to withdraw from the agreement during a legally established period—often referred to as a due diligence or rescission period—before the transaction is finalized, they are typically entitled to a full refund of their earnest money. The process involves notifying both the buyer and the seller about the rescission and the intention to return the earnest money. This ensures transparency and maintains fairness in the transaction, allowing both parties to be informed of the decision and the subsequent action regarding the earnest money. It also adheres to the ethical standards in real estate transactions, emphasizing communication and proper handling of funds.

When a buyer rescinds an accepted offer after reviewing condominium documents, the appropriate action for the firm is to disburse the earnest money to the buyer after notifying both parties. This is grounded in the principle that if a buyer decides to withdraw from the agreement during a legally established period—often referred to as a due diligence or rescission period—before the transaction is finalized, they are typically entitled to a full refund of their earnest money.

The process involves notifying both the buyer and the seller about the rescission and the intention to return the earnest money. This ensures transparency and maintains fairness in the transaction, allowing both parties to be informed of the decision and the subsequent action regarding the earnest money. It also adheres to the ethical standards in real estate transactions, emphasizing communication and proper handling of funds.