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

If a transaction does not close, how can funds be released?

1. By a verbal agreement of the parties

2. Upon written consent of all parties involved

3. Through the brokerage's discretion

4. Automatically after a certain time period

The correct answer is: Upon written consent of all parties involved

In real estate transactions, the release of funds when a deal does not close hinges on the consent of the parties involved. Written consent is critical for ensuring that all parties have agreed on the disposition of the funds, which provides a clear and documented agreement that can help prevent any disputes. This process protects the interests of everyone involved, establishing a legal framework that confirms how the funds should be handled. A verbal agreement lacks the legal backing necessary to enforce the release of funds, making it a risky option. Similarly, relying on brokerage discretion could lead to conflicts of interest or misunderstandings, as brokers are not the rightful owners of the funds involved. Additionally, an automatic time-based release could cause complications if one party disputes the release or believes they are entitled to the funds. Such options do not provide the clear, mutual agreement necessary for a smooth and conflict-free transaction.