Michigan Real Estate Exam Practice Question
The purchase agreement provides for release of earnest money to the seller after the buyer's property inspection. The seller requests the earnest money prior to the inspection. The broker should:
Correct Answer: D
Rationale: Releasing earnest money prior to the buyer's property inspection contradicts the terms of the purchase agreement, which stipulates that the funds should only be released after the inspection.
Option A is incorrect as it violates the agreement's conditions, potentially leading to legal issues. Option B, while informative, does not address the obligation to adhere to the agreement's terms and could mislead the buyer. Option C is also inappropriate; verbal approvals are insufficient for such transactions, and the broker must act in accordance with the written agreement. Thus, refusing to release the earnest money ensures compliance with the contract and protects the buyer's interests.
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