1. A VAR Broker
Sales Meeting
Kit
EARNEST MONEY
DEPOSITS (EMD)

2. Brokers, click
the link below
to access a
related online
video.
http://www.varealt
or.com/SMK-EMD
1VIDEO
COMPONENT
http://www.varealtor.com/SMK-EMD

3. Next, we’ll go
through a
series of three
Q&As to see
how much you
know about
the topic.
2Q&A/QUIZ
COMPONENT

4. ??
When does an EMD have to
be deposited?
Q:

5. 5
days
The deposit must occur
within five business banking
days following ratification
unless otherwise agreed to in
writing by the parties.
A:

6. ??
When dealing with a short
sale, the seller and buyer want
to delay depositing the EMD
until the lender approves the
deal. Is that OK?
Q:

7. Yes,
if…
Yes, remember parties can
agree to a deposit date other
than the standard five
business banking days
following ratification.
A:

8. VAR’s Short Sale Addendum to
Residential Contract of Purchase
contains language below to meet the
preference from the previous Q&A:
The parties agree that the earnest money
deposit will be deposited in Escrow
Agent’s escrow account (check one):
___ within five (5) business banking days
after the date this Contract is fully ratified
by Purchaser and
Seller; OR
___ within ___ days after delivery by
Seller to Purchaser of notice of lien-holder
approval of this
Contract.
VAR
RESOURCE
http://www.VARealtor.com/StandardForms

9. ??
I am the principal broker
escrow agent; what if my
agent forgets to give me the
EMD within five business
banking days? In other
words, funds are not
deposited until the 6th day?
Q:

10. Uh-
oh.
This violation must be
reported to the Real Estate
Board within three business
days. In fact, any escrow
violation must be reported.
A:

11. Mary Smith represents the buyer and is
holding the earnest money deposit (EMD) for
the buyer and seller. An addendum to the
purchase contract states:
Buyer has 30 days to conduct any inspections
he wants and may terminate this contract for
any reason if he finds something he does not
like within those 30 days. If the buyer
terminates pursuant to this provision, the
escrow agent shall immediately disburse the
earnest money deposit to the buyer with no
necessary signatures from either party.
The buyer found something he didn’t
like, terminated the contract, and demanded
that Mary give him the EMD. Mary followed the
contract and client instructions and released
the funds to the buyer. No 30-day letter was
involved and no signed release was obtained.
Was this an appropriate action by Mary?
Please discuss.
This is where
the rubber
meets the
road. Let’s talk
about how to
apply topic
knowledge to a
real-world
situation.
3SCENARIO
COMPONENT

12. No, Mary likely violated Real Estate
Board Regulations.
A licensee holding the EMD is bound
by the REB’s regulations that
provide, in a nutshell, the no matter
what anybody says, you may not
disburse without either the written
consent of the buyer or seller, or a
court order.
The contract language does not
trump Mary’s duties as a real estate
licensee to hold on to the EMD until
she has obtained a written release as
to the funds signed by both parties or
a court order.
SCENARIO
ANSWER

13. Visit the VAR
website f or a
growing library of
videos and other
tools to help you
be successful
AND lawf ul and
ethical in your
real estate
practice.
www.VARealtor.c
om
WANT
MORE?
Your Virginia Association of REALTORS® has lots of
great legal information for you:
 VARealtor.com/LegalResources
 VARealtor.com/LegalVideos
 VARealtor.com/EthicsCenter
 VARealtor.com/StandardForms
 VARealtor.com/Commonwealth
And look for more Blake in VAR’s
Commonwealth Online e-newsletter, at VAR’s
annual conferences, and at your local
association.