What is a requirement for the deposit of earnest money in Kentucky?

In Kentucky, the proper procedure for handling earnest money is that it should not be placed in escrow until the contract is signed. This approach ensures that the earnest money is tied to a legally binding agreement; without a signed contract, the status of the transaction is uncertain, and it would not be appropriate to hold the earnest money in escrow.

Placing earnest money in escrow only after a contract is signed protects both the buyer and the seller. For the buyer, it provides assurance that their funds will be safeguarded in a neutral account, and for the seller, it signifies the buyer's commitment to moving forward with the transaction. By waiting until the contract is signed, all parties have a clear understanding of the terms and conditions involved, which helps to prevent disputes and miscommunication regarding the earnest money.

The other options do not align with this protocol and could lead to misunderstandings or legal complications in the transaction process.