Trust Funds
In Alabama, a qualifying broker's trust account must be reconciled:
ADaily
BWeekly
CMonthly✓ Correct
DAnnually
Explanation
Alabama regulations require that trust accounts be reconciled monthly. The broker must compare the trust account balance against the records of individual client funds held.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
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.
Math Concepts
State-Specific Concepts
Trust Account Rules
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