Colorado License Law
The Colorado 'Trust Account' requirements mandate that:
AA. Brokers may keep client funds in any bank account
BB. Client funds must be kept in a separate, designated trust account at a federally insured depository, clearly identified as a trust account✓ Correct
CC. Trust accounts must earn interest paid to the broker
DD. Only the employing broker may sign trust account checks
Explanation
Colorado Commission rules require that client funds (earnest money, security deposits, rents) be held in a separate trust account at a federally insured institution (bank, savings institution). The account must be clearly designated as a trust account.
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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.
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.
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 Rules
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