Minnesota License Law
Under Minnesota license law, 'earnest money' held by a broker must be placed in a:
APersonal savings account of the broker
BSeparate trust account maintained by the broker, distinct from operating funds✓ Correct
CAccount controlled by the listing agent
DJoint account shared with the buyer's agent
Explanation
Minnesota requires brokers to maintain earnest money and other client funds in a separate trust account, completely segregated from operating and personal funds. The trust account must be reconciled regularly, and the broker must keep detailed records of all deposits and disbursements.
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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.
Buyer's AgentA real estate licensee who represents the buyer's interests in a transaction, owing fiduciary duties to the buyer.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Math Concepts
State-Specific Concepts
Trust Account RulesLicense Law
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