Which of the following is an example of a third party that may hold earnest money?

• A. The Seller
• B. Title Company
• C. The Seller's Lawyer
• D. The Listing Agent

Answer: (B)

Earnest money is a deposit that shows the buyer’s serious intent and is kept in escrow by a neutral third party until the deal closes or terminates. A title company is a common neutral holder, safeguarding the funds and releasing them only according to the contract or a court order, which protects both buyer and seller.

The seller, the seller’s lawyer, and the listing agent are all involved in representing one side of the transaction rather than serving as an impartial repository for funds. Holding earnest money themselves could create conflicts of interest or raise concerns about neutrality, which is why a title company serves as the appropriate third-party holder.