Trust Funds
A broker receives an earnest money check made out to the seller. The buyer instructs the broker to hold the check uncashed until offer acceptance. The broker MUST:
ADeposit the check within three business days regardless
BHold the uncashed check as instructed AND disclose this arrangement to the seller✓ Correct
CRefuse to accept a check not made out to the broker or escrow
DCash the check and deposit proceeds in trust
Explanation
A broker may hold an uncashed check per buyer's instructions if all parties are informed. However, the broker must disclose this arrangement to the seller (offeree) before or upon presentation of the offer, as required by DRE regulations.
Related California Trust Funds Questions
- A broker who maintains a property management business must:
- When escrow is used in a California real estate transaction, trust funds are typically held by:
- A broker's trust account shortage (the bank balance is less than the sum of all beneficiary ledger balances) most likely indicates:
- A broker receives a check as earnest money. Under California law, the broker must deposit it into the trust account within:
- For how long must a California broker maintain trust fund records?
- Conversion of trust funds occurs when a broker:
- What is 'impound' or 'reserve' accounts in real estate lending?
- A DRE audit of a broker's trust account reveals that the balance of individual client ledgers is less than the total bank balance. This condition is called:
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