Real Estate Math
A Nebraska broker manages a trust account with the following activity: deposits $12,000, disburses $8,500 in earnest money to closing. The ending balance should be:
A$8,500
B$3,500✓ Correct
C$12,000
D$20,500
Explanation
Ending balance = Beginning balance (assume $0) + Deposits − Disbursements = $0 + $12,000 − $8,500 = $3,500. Trust account reconciliation requires exact tracking 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.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
State-Specific Concepts
Trust Account Rules
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