An account
that is separate and apart from the
general account of the corporation.
Real estate trust accounts are set
up by the real estate brokerages for
the benefit of buyers and sellers.
Real estate
trust accounts are nearly identical
to escrow accounts and are legal
arrangement in which an asset (such
as
cash,
real property or other tangible
assets) is deposited into
safekeeping (e.g. a bank account)
under the trust of a neutral third
party (escrow agent) pending
satisfaction of
contractual contingency or
condition. Once the condition has
been met, the escrow agent will
deliver the asset to the party
prescribed by the contract.
Every buyer
when making an offer to purchase a
real estate property, will provide a
deposit to be held in trust, until a
future date when all conditions of
that offer are either fulfilled or
waived.
For example,
a buyer making an offer conditional
on financing with the deposit of
$10,000 to be held in trust and
credited towards the purchase price
of the property upon the buyer being
able to obtain the financing. Unless
the buyer gives notice to the seller
or the seller's agent that this
condition is met, the deposit will
be returned to the buyer in full and
without deduction.
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