Under what condition is it permissible to place earnest money in an interest-bearing account?

Placing earnest money in an interest-bearing account is permissible when all parties having an interest in the funds agree to this procedure in writing. This requirement ensures that all stakeholders involved in the transaction are informed and have consented to the terms regarding the handling of the earnest money, particularly the allocation of any interest that may accrue from the account.

This rule is important for maintaining transparency and trust among the parties involved in a real estate transaction. By obtaining written agreement from all parties, it helps to prevent disputes concerning how the earnest money is managed and what happens to any interest earned during the period the funds are held.

Other conditions, such as payment of interest to the seller at closing or limitations on the amount of funds being placed, do not sufficiently protect the interests of all parties involved unless they also align with the requirement of obtaining consent in writing. Additionally, written consent from the broker alone does not address the need for mutual agreement from all parties with a vested interest in the funds. Therefore, requiring unanimous written agreement is the correct protocol in these situations.