You need to know – What is an escrow account?

YouNeedToKnowWeb500An escrow account is an account maintained for the deposit of money being held in trust for others

It is not uncommon for a broker to collect a deposit from a buyer when preparing a purchase contract; the deposit does not belong to the broker, but is being held in trust for the buyer until the contract is accepted or rejected by the seller

In this case, the deposit must be placed in an escrow account

You need to know – What must a broker do with an earnest money deposit?

YouNeedToKnowWeb500A broker who receives an earnest money deposit must place the funds in an escrow account no later than the end of the third business day after a sales associate or other employee of the company received it

If the broker chooses not to operate an escrow account the funds must be deposited in an attorney’s trust account or with a title company