A real estate broker wrote a full price offer of $350,000 for a buyer. The amount of the earnest money deposit was $25,000. The offer was accepted and the broker placed the deposit in her escrow or trust account. The next week, the buyer and the seller decided to cancel their agreement and notified the broker in writing to return the deposit. Which of the following is TRUE?

This choice is incorrect because the broker does not have the right to negotiate for her commission from the earnest money deposit unless there is an agreement in place specifying that she can retain a portion of the deposit for her services. The default action is to return the deposit in full unless otherwise directed.

This option is misleading as it suggests that the broker has the authority to deduct a portion of her commission from the deposit without prior agreement. The broker must return the deposit fully unless both parties consent to a different arrangement regarding commission.

This statement is incorrect as the broker cannot automatically deduct her commission from the earnest money deposit. Commission is typically earned upon the successful completion of a transaction, and in this case, since the agreement was canceled, the broker has not earned a commission.