Trust Funds
Alabama regulations require a broker to maintain their trust account in a financial institution located in:
AAny state in the United States
BAlabama✓ Correct
CThe state where the property is located
DThe state where the buyer is from
Explanation
Alabama requires broker trust accounts to be maintained in a federally insured financial institution in Alabama.
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Key Terms to Know
Deed of Trust
A security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
State-Specific Concepts
Trust Account Rules
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