A real estate broker wrote a full-price offer of $350000 for a buyer. The earnest-money deposit was $25000. The offer was accepted and the broker placed the deposit in her escrow account. The next week the parties cancelled the contract in writing and asked the broker to return the deposit. Which is TRUE?

This choice implies that the broker has the right to negotiate her commission from the earnest money deposit, which is incorrect. The commission is typically a separate agreement and not automatically deducted from the deposit unless explicitly stated in the contract. The broker's role is to facilitate the return of the deposit unless authorized otherwise.

This option suggests that the broker can take a portion of her commission from the deposit without prior agreement. However, commissions are determined by separate agreements and cannot be unilaterally deducted from the deposit. The broker is obligated to return the full deposit unless a specific agreement states otherwise.

This choice wrongly assumes that the broker has automatically earned a commission simply because a contract was initiated. Commissions are earned upon the successful closing of a transaction and cannot be taken from the deposit unless there is a clear agreement allowing the broker to do so.