Agency
In New Mexico, an agent has a duty to 'account' for all funds. This means:
AFiling annual reports with NMREC
BPromptly depositing and properly handling all money received on behalf of clients✓ Correct
CAuditing the client's personal finances
DRefusing to accept earnest money
Explanation
The duty to account requires licensees to promptly deposit, properly track, and not commingle or convert client funds (earnest money, security deposits, rents) held in trust.
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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.
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