What is a broker’s “trust” account?
In terms of a real estate sales agreement, a “trust” account is typically an account operated by a real estate broker that is used to hold buyer deposits until closing.
For example: buyer Smith makes an offer to purchase a home that is accepted. With the offer is a $10,000 deposit. This deposit is usually payable to the Seller’s brokerage where it will go in their trust account.
Now if the sale firms up that deposit now goes towards buyer smith down payment.
If the sale doesn’t firm up and the buyer decides to walk away due to financing or issues with the inspection as a basic example, that deposit will then go back to buyer smith.
This is at its basic form and there is other scenarios that could arise and having said that if you’re in a unique situation or would like to learn more, make sure to head over to http://planwithmike.ca and let’s have a chat.
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