Washington License Law
Under Washington's broker license law, which of the following constitutes 'commingling' of funds?
AKeeping client funds in a separate trust account
BDepositing client earnest money into the broker's personal operating account✓ Correct
CMaintaining a trust account at a Washington bank
DPaying firm expenses from the firm's operating account
Explanation
Commingling is the illegal mixing of client funds (earnest money, security deposits) with the broker's own personal or business funds. Client funds must be kept in a separate 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.
Deed of TrustA security instrument used in many states instead of a mortgage, involving three parties: borrower (trustor), lender (beneficiary), and a neutral trustee.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Math Concepts
State-Specific Concepts
Broker SupervisionTrust Account RulesLicense Law
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