Additional Topics

Question 1

What accounts are required any time a real estate brokerage firm is going to hold money that belongs to other people?

Answer 1

Trust accounts

Question 2

What two types of accounts do brokerage firms typically have?

Answer 2

Operations (for running the firm) and trust accounts (to hold money for the benefit of others)

Question 3

The principal broker must establish an account (before or after?) receiving money belonging to others.

Answer 3

Before

Question 4

Principal brokers who have trust accounts must follow specific rules. When are they subject to commission audits?

Answer 4

At any time

Question 5

When operating a trust account, principal brokers must be able to withdraw funds without a _______

Answer 5

cosigner

Question 6

Can the trust account contain operating funds or funds belonging to employed broker associates?

Answer 6

No, employed brokers’ commissions are paid from the broker’s operation account.

Question 7

True or false, the trust account may contain sufficient brokerage funds to open and operate the account.

Answer 7

True

Question 8

How many trust accounts does a broker need?

Answer 8

Enough to ensure that funds will not be commingled.

Question 9

The commission requires the following accounts when the broker is holding funds for others:

Answer 9

• Sales trust account (earnest money) - sales transactions pending closing
• Management trust account - property management services
• Security deposit trust account - from tenant for lease and rental units
• advance rental - rental money collected in advance (short term rentals for resort or vacation)
• owners association true account - held on behalf of planned community associates

Question 10

The broker’s sales trust account may be an interest-bearing account if the interest benefits an affordable _______ ______

Answer 10

affordable housing program

Question 11

Where are earnest money deposits typically payable

Answer 11

to the listing brokerage firm

Question 12

True or false: checks must be deposited no later than a third business day following the notice of acceptance of the offer.

Answer 12

True

Question 13

With permission of the parties, can earnest money be held in the trust account of a third party, such as a title company?

Answer 13

Yes

Question 14

If a contract terminates under a provision of the contract or ends due to an undisputed default of either party, the broker is required to ______ the funds to the party without delay.

Answer 14

disburse the funds

Question 15

If there’s a dispute regarding disbursement of the earnest money, the broker may

Answer 15

hold the funds until it is resolved or interplay the funds to the court if the dispute is not resolve or deliver notice to the parties of intent to disburse funds to the buyer if no action is taken within 120 calendar days of notice.

Question 16

For earnest money promissory notes, they are made payable to the ______ brokerage and must be identified with the due date specified in the contract to buy and sell.

Answer 16

Listing brokerage

Question 17

For earnest money promissory notes, the due date must be before closing in time for the funds to be _____ funds at closing.

Answer 17

Good funds

Question 18

For earnest money promissory notes, if the note cannot be collected when due, the _____ broker must inform the seller immediately and is responsible for the collection of funds

Answer 18

listing broker

Question 19

Principal brokers must have trust account records that include an account journal of all cash receipts/disbursements–a ___________ record of all activity in the account.

Answer 19

Chronological record

Question 19

Principal brokers must have trust account records that include a broker ___ card, for funds belonging to the brokerage firm.

Answer 19

Broker ledger