Commingling and conversion exam - Real Estate Flashcards

Commingling and conversion exam - Real Estate Flashcards Debra's listing agent, Raj, just called to tell her that he'd received an offer on her house and an earnest money check for $4,500. "I'm on my way over to go through the offer with you. I think you'll like it!" Debra's excited, and she knows exactly what she wants to spend that $4,500 on.What's wrong with Debra's thought process?a) Debra's forgetting that she owes part of these funds to her listing ogent.b) She can't cash the earnest money check until the transaction closes.c) She hasn't seen the offer, so she doesn't know if she'll accept it and get the earnest money check.d) The earnest money doesn't belong to Debra. It will be held in an escrow account.

d) The earnest money doesn't belong to Debra. It will be

held in an escrow account.Which of the following statements about escrow accounts is correct?a) An escrow account is a temporary account that's opened for use with a single transaction and closed after the transaction closes.b) An escrow account is held by either the buyer or seller, and houses the buyer's earnest money until closing.c) Escrow accounts are managed by brokerage firms, and hold funds used to pay operating expenses and agent commissions.d) Escrow accounts are managed by escrow agents, and are used to hold funds belonging to others,such as earnest money deposits.

d) Escrow accounts are managed by escrow agents, and

are used to hold funds belonging to others,such as earnest money deposits.Xavier deposited a $3,000 earnest money check into his personal account for safekeeping while he was on vacation. The balance in his account when he left on vacation was $4,200, and when he returned, it was $2,800.He withdrew enough funds from his savings account to cover the earnest money check and delivered the funds to the escrow agent. Which statement best represents Xavier's issue?a) Xavier is guilty of commingling and conversion.b) Xavier is guilty of commingling only.c) Xavier is guilty of conversion only.d) Xavier is guilty of theft.

a) Xavier is guilty of commingling and conversion.

Buyer Susie's a little nervous about the $20,000 earnest money check she just deposited with the title company.When should she expect to see this money applied toward her purchase of the property?a) When conditions are met at closingb) When her mortgage is approvedc) Within 10 days of the home inspectiond) Within six months of closing

a) When conditions are met at closing

Greta is working with agent Brandon to sell some property.Nelson represents the buyer, Rigby. Of these four parties,

who will pay the earnest money?a) Brandonb) Gretac) Nelsond) Rigby

d) Rigby

What is the difference between commingling and conversion?a) Commingling is mixing client funds with your own; conversion is using them.b) One involves client funds; the other involves your own funds only.c) Only commingling is illegal.d) They are the same thing.

a) Commingling is mixing client funds with your own;

conversion is using them