Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

According to Texas law, when should funds be deposited into the account after a contract is signed?

1. By the end of the current business day

2. Within a week of signing the contract

3. Within two business days from the signing

4. At the closing of the transaction

The correct answer is: Within two business days from the signing

In Texas real estate law, it is required that funds must be deposited into the escrow account within two business days from the signing of the contract. This regulation ensures that earnest money is handled in a timely manner, providing security to both the buyer and the seller during the transaction process. The prompt deposit of funds also facilitates confidence in the transaction, indicating that the buyer is committed and serious about purchasing the property. Timely deposit is important for maintaining the integrity of the contract and for compliance with Texas Real Estate Commission (TREC) regulations. By having a specified timeframe—two business days—Texas law helps protect all parties involved and avoid potential disputes regarding the handling of earnest money. This requirement is a reflection of the state’s commitment to clarity and professionalism in real estate transactions. Other options do not align with this requirement; for instance, depositing funds by the end of the current business day may not be practical for all situations, and suggesting a week or at the closing does not adhere to the strict regulatory expectations intended to protect parties during the contract period.