Alabama License LawIntermediateAlabama Exam
A salesperson in Alabama receives an earnest money deposit. What must they do with it?
ADeposit it in their personal account temporarily
BTurn it over to their qualifying broker promptlyCorrect
CHold it until closing
DSend it directly to the seller
Why Turn it over to their qualifying broker promptly Is Correct
Answer B: Turn it over to their qualifying broker promptly
A salesperson must promptly turn over any earnest money or trust funds to their qualifying broker. Salespersons cannot maintain their own trust accounts in Alabama.
Key Alabama License Law Terms in This Question
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Joint TenancyCo-ownership where two or more people hold equal, undivided interests with the right of survivorship — when one owner dies, their share passes to the surviving owners.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
Math Concepts
State-Specific Concepts
Trust Account RulesEscrow Disputes
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