After a buyer’s inspection contingency period has expired the buyer demands that the seller make extensive repairs or the buyer will cancel. The seller refuses. The earnest money is being held in the broker’s trust account. What should the broker do?

Releasing the earnest money to the seller without any agreement or mutual consent from both parties could expose the broker to legal liability. The broker must ensure that there are no disputes regarding the funds before proceeding with release, particularly when the buyer has not agreed to waive their rights.

While notifying the buyer of intentions is prudent, the broker cannot simply proceed with the release of earnest money without having a clear directive from both the buyer and the seller. Doing so might escalate the dispute between the parties and does not resolve the underlying issue of the buyer's demand.

Verbal approval from the buyer may not suffice for the release of earnest money, especially when there is a dispute regarding the condition of the sale. The broker should not act on verbal agreements alone, as they lack the necessary documentation and may lead to complications in future claims.