Pass the Real Estate Maryland Real Estate Maryland-Real-Estate-Salesperson Questions and answers with Dumpstech

For a valid conveyance by deed, in addition to other deed validity requirements (competent grantor, identifiable grantee, granting clause, adequate description, consideration recited, execution, etc.), there must be “delivery and acceptance”. Delivery by the grantor and acceptance by the grantee are the operative acts that pass title. An exchange of money is not required to effect the legal transfer (consideration may be nominal and need not be physically exchanged at that moment). Judicial validation is not a standard requirement for voluntary conveyances.

In Maryland, earnest money (“trust money”) is disbursed strictly according to the purchase contract and escrow instructions, and a broker must hold it in escrow until: (1) the contract terms specify its release (e.g., upon default or a “non-refundable”/“hard” deposit provision), (2) the parties sign a mutual written release, or (3) there is a court order.

“Hard money” (non-refundable deposit) is contractually designated as the seller’s if the buyer terminates for reasons not protected by a contingency. If the buyer agreed to hard money and then cancels due to a low appraisal after waiving or not having an appraisal/financing contingency, the deposit is typically forfeited to the seller per the contract.

If the buyer properly invokes an appraisal (or related financing) contingency (Option A), the earnest money is generally returned to the buyer, not disbursed to the seller.

Conversion by an escrow agent (Option C) is misconduct, not a lawful disbursement.

If the seller wrongfully cancels (Option D), the buyer usually receives the deposit back and may pursue additional remedies.

References (Maryland Sources / Pre-Licensing Core Content):

Maryland 60-Hour Course: “Closing the Real Estate Transaction” and “Real Estate Brokerage Operations” (trust/escrow money handling; release conditions; default and liquidated damages).

Business Occupations & Professions (Maryland Real Estate Brokers Act), Title 17 (broker escrow duties; release only per contract, mutual release, or court order).

COMAR 09.11.01 (Trust/escrow accounts), COMAR 09.11.02 (standards of practice; prohibition on conversion).