Agency
A New Mexico real estate broker must avoid 'commingling' funds. Which of the following actions constitutes commingling?
AKeeping client trust funds in a dedicated trust account
BMixing client trust funds with the broker's own operating funds✓ Correct
CMaintaining separate accounts for different clients
DInvesting trust funds in U.S. Treasury bills
Explanation
Commingling means mixing client funds (earnest money, rents, security deposits held in trust) with the broker's own business or personal funds. This is strictly prohibited and is grounds for license revocation.
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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.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
Math Concepts
State-Specific Concepts
Trust Account Rules
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