Which of the following would be considered an acceptable reason to withdraw funds from a trust account?
Why Disbursement to the appropriate party at or after closing per contractual terms Is Correct
Answer C: Disbursement to the appropriate party at or after closing per contractual terms
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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- Which of the following is NOT an acceptable reason for a broker to withdraw funds from an Alabama trust account?Trust Funds
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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.
ProrationThe division of ongoing property expenses (taxes, HOA dues, rents) between buyer and seller at closing based on their respective days of ownership.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
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