If a deposit check is made payable to a salesperson, what action must the salesperson take?

If a deposit check is made payable to a salesperson, what action must the salesperson take?

• A. Accept the check if the buyer insists
• B. Accept the check and hold it until closing
• C. Request that the check be made payable to the real estate firm
• D. Refuse to accept the check

Answer: (D)

When a deposit check is made payable to a salesperson, the correct action is to refuse to accept the check. In Michigan, real estate regulations mandate that all earnest money deposits must be made payable to the brokerage firm rather than an individual salesperson. This requirement is in place to ensure that the funds are properly handled and that there is a clear chain of accountability. Accepting a check made out to the salesperson could lead to potential issues regarding the handling of funds and could create liability issues for the salesperson and the brokerage. Additionally, it is essential for all transactions to adhere to proper legal and ethical standards, which is why brokerage firms have specific procedures in place for managing such deposits. Thus, the proper course of action for a salesperson in this scenario is to refuse acceptance and request that the check be made out to the brokerage instead.

When a deposit check is made payable to a salesperson, the correct action is to refuse to accept the check. In Michigan, real estate regulations mandate that all earnest money deposits must be made payable to the brokerage firm rather than an individual salesperson. This requirement is in place to ensure that the funds are properly handled and that there is a clear chain of accountability. Accepting a check made out to the salesperson could lead to potential issues regarding the handling of funds and could create liability issues for the salesperson and the brokerage. Additionally, it is essential for all transactions to adhere to proper legal and ethical standards, which is why brokerage firms have specific procedures in place for managing such deposits. Thus, the proper course of action for a salesperson in this scenario is to refuse acceptance and request that the check be made out to the brokerage instead.