If you are representing the seller and you receive an offer from a buyer who indicates on the contract that they are a licensed agent, it would behoove you to require the earnest money be held by your broker. Having the buyer’s company hold the earnest money has the potential to be problematic, particularly when the buyer is also the broker. Over the years, we have seen several LLR cases in similar situations where the earnest money never got deposited with the agency. We also know of many occasions where disputed earnest money was released back to the buyer without the signed release. Essentially, the checks and balances are eroded.
It is always better to protect your seller by demanding that the earnest money be held by your broker.
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