We have two jobs regarding earnest money.

First: Hold safe and account for all money or property entrusted to the agent” (R162-2f-401a1f)

Second: Notify the listing agent if the earnest money is not received and deposited on time. Some examples would include the client not getting the Earnest Money delivered to the brokerage or title company, the check was post-dated, the check bounces, etc. The reason we would notify the other agent is this is a material fact concerning “the client’s ability to perform on the contract.” (R162-2f-401a1dii) If this were to happen, you do not withhold this information from the Listing agent. You need to notify the listing agent the same day you find out that the earnest money is late or has bounced.

It is not an agent’s job to continue to try and collect the earnest money from a client. When Earnest Money is involved it’s because it’s a contract between the buyer and seller. If you haven’t received the check on time you should call your client and see if they still will be able to turn in earnest money and then call the agent and let them know the earnest money is late but you have found a solution. You will then need to put an addendum together that extends the earnest money deadline. If your client does not respond to your calls/texts you still need to call the other agent and inform them that the earnest money is late and that you will update them.

Question: Can the Seller cancel the REPC if the earnest money is turned in later than allowed on the contract?

Yes. See section 16 of the REPC.

Question: A married couple were buying a home. On the contract only the husband is on the REPC because of income or credit issues. The wife writes a $5000 check as earnest money from her account. While the contract is in escrow the couple decides to get a divorce and decide to cancel the REPC prior to the Due Diligence Deadline. Who gets the earnest money?

This may surprise you but the earnest money will be returned to the husband unless he gives the brokerage or title company written instruction to release the funds to the wife. This scenario would be the same if the earnest money was provided by a parent, a sibling, the agent, etc. The contract states the Earnest Money goes back to the Buyer and not to the person that deposited the Earnest Money.