A real estate broker's operating account is used for:
Why Day-to-day business expenses such as rent, payroll, and advertising Is Correct
Answer B: Day-to-day business expenses such as rent, payroll, and advertising
Exam Tip: Trust Funds
Trust fund questions test the rules for handling client money. Know the deadlines for depositing trust funds, what constitutes commingling vs. conversion, and the penalties for violations.
Key Trust Funds Terms in This Question
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- In Alabama, the term for a broker's obligation to keep client funds separate from personal or business operating funds is:Trust Funds
- A broker's operating account shows he earned $85,000 in commissions and spent $42,000 on business expenses. His net income from the business is:Real Estate Math
- Conversion of client funds in a trust account occurs when a broker:Trust Funds
- In Alabama, who is ultimately responsible for ensuring that client funds are properly maintained in the trust account?Trust Funds
- Which of the following is NOT an acceptable reason for a broker to withdraw funds from an Alabama trust account?Trust Funds
- Which of the following is typically NOT included in the operating expenses used to calculate NOI?Property Management
Key Terms to Know
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Math Concepts
State-Specific Concepts
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