Colorado License LawIntermediateColorado Exam
A Colorado broker's Commission-required trust account may NOT hold which of the following?
AEarnest money deposits from real estate transactions, in general
BSecurity deposits for property management clients
CThe broker's personal savings or business operating fundsCorrect
DDown payment funds awaiting closing
Why The broker's personal savings or business operating funds Is Correct
Answer C: The broker's personal savings or business operating funds
Trust accounts are strictly for client funds. A Colorado broker's trust account may NOT contain the broker's personal savings, business operating funds, or any funds not belonging to clients.
Key Colorado License Law Terms in This Question
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Math Concepts
State-Specific Concepts
Trust Account RulesEscrow Disputes
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