Iowa Real Estate Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the Iowa Real Estate Test. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is the requirement for a broker when a buyer instructs them to hold their earnest money check without depositing it until closing?

The check must be kept in a personal account
The check must be deposited within five banking days of acceptance
The check is not required to be deposited at all
The check must be returned to the buyer immediately

The correct answer is: The check must be deposited within five banking days of acceptance

When a buyer instructs their broker to hold an earnest money check without depositing it until closing, the requirement is to deposit the check within five banking days of acceptance. This means that even if the buyer has requested the broker to hold the check, the broker is still required by law and industry standards to protect the interests of all parties by ensuring that the earnest money is appropriately handled. This rule is in place to ensure that the earnest money is secure and not unduly delayed, which helps maintain transparency and trust in the transaction. If the broker were to keep the funds unaccounted for or in a personal account, it would not provide the necessary protection for the buyer’s investment and could lead to potential disputes. Thus, timely deposit into an escrow account serves to safeguard the interests of both the buyer and the seller.