A broker may maintain a personal (broker's) funds balance in the trust account of up to how much to cover bank service charges?
Why A reasonable amount, not to exceed $200, to cover bank charges Is Correct
Answer C: A reasonable amount, not to exceed $200, to cover bank charges
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.
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- Under California law, a real estate broker who manages property for clients must maintain a separate trust account for client funds. Mixing client funds with the broker's personal funds is called:Agency
- Under California law, the maximum amount a broker may keep of their own funds in a trust account (to cover bank service charges) is:DRE & Licensing
- A real estate licensee in California is found to have commingled client funds with their personal bank account. This violates:DRE & Licensing
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Key Terms to Know
A 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.
Transfer TaxA tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.
State-Specific Concepts
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