Earnest money deposit may be held by someone other than the firm to which the check is made out to only under which condition?

• A. When both parties agree in writing
• B. Always
• C. Court orders
• D. Broker's discretion

Answer: (A)

Mutual written consent is required to designate a third party to hold earnest money. When both the buyer and seller agree in writing to have a different entity—such as an escrow company, title company, or attorney—hold the funds, it creates a neutral, verifiable custodian and clarifies how and when the funds will be released.

This protects both parties and satisfies fiduciary duties, ensuring the money isn’t controlled unilaterally by the listing or selling firm. Other options don’t fit because the standard practice relies on documented agreement; it’s not automatic, and while a court order or discretionary action might come into play in certain situations, they aren’t the agreed-upon method for designating a third-party holder.