Section 15: Unit 3 Practice Exam Flashcards

Section 15: Unit 3 Practice Exam Flashcards

Cherry is a Michigan real estate broker. She maintains several trust accounts for real estate transactions. How much of her personal money can she deposit in each of these accounts?$0, as anything else would be a commingling violationOnly the amount needed to pay account-related feesUp to $2,000 between all trust accountsUp to $2,000 in each trust account Up to $2,000 in each trust accountBrokers can maintain more than one trust account and are permitted to have up to $2,000 of their own money in each account to meet minimum balance requirements and to pay account fees.Georgina is an escrow agent who's holding funds for several transactions. Which of these statements about how she'll disburse these funds is true?If the transaction closes, Georgina will disburse the earnest money to the listing broker as part of his commission.If the transaction closes, she'll refund the earnest money to the buyer, since the buyer brings the full amount necessary for the down payment and loan costs to closing.If the transaction doesn't close, Georgina will disburse the earnest money as instructed by the parties or according to state law.If the transaction doesn't close, Georgina will refund the earnest money to the buyer.If the transaction doesn't close, Georgina will disburse the earnest money as instructed by the parties or according to state law.How long must Michigan brokers retain deposits and other escrow funds?At least 30 daysAt least 90 daysUntil directed by the department to release the fundsUntil either the transaction closes or is terminated prior to the transaction closing Until either the transaction closes or is terminated prior to the transaction closing Jill needs to pay the web developer who created a new website for her brokerage, but her checking account is low, so she floats herself a loan from earnest money kept in the brokerage's escrow account to pay the developer. Which answer correctly identifies the violation(s) Jill has committed?Commingling and conversionCommingling onlyConversion and fraudDeceptive business practice Commingling and conversion Barring any agreement to the contrary, when must a buyer's earnest money be deposited into escrow or a client trust account?On the same day it's received by the brokerWithin five business days of receipt and ratification of contractWithin two business days of offer acceptanceWithin two business weeks of receipt and ratification of contract Within two business days of offer acceptance Which of these is an example of conversion of funds?Marcus converted a CD to cash and deposited it in the firm's operating account.Monica used funds from the firm's trust account to pay her firm's rent.Soo Min

transferred funds from her firm's trust account to the closing company's trust account in time for settlement.Tristan deposited a client's earnest money check into the firm's operating account.Monica used funds from the firm's trust account to pay her firm's rent.Jared is interested in purchasing a property in Michigan.Janelle, the real estate salesperson acting as Jared's

agent, is employed by broker Mitchell. Mitchell maintains trust accounts at First National Bank. Jared is writing a deposit check as part of an offer for a property. To whom or what entity should he make the check payable?First National BankJanelle, his agentMitchell, the brokerThe property's seller Mitchell, the broker

Charlie is a new Michigan real estate broker. He's setting up an account to hold deposits and other trust funds associated with real estate transactions. Which of these is an appropriate account?An interest-bearing demand deposit escrow accountAn interest-bearing personal checking account in Charlie's nameA non-interest-bearing business account in the brokerage's nameA non-interest-bearing demand deposit trust account A non-interest-bearing demand deposit trust account Which of the following is an example of commingling?Mixing earnest money with personal fundsMixing two earnest money depositsPaying licensee bonuses from forfeited escrow depositsUsing escrow funds to pay business expenses Mixing earnest money with personal funds At a minimum, how many years must trust account records be kept in Michigan?Five yearsFour yearsThree yearsTwo years Three years Which of the following situations would result in the earnest money being disbursed to the seller?The buyer gets cold feet and cancels the transaction on the day of closing.The house burns down.The seller gets cold feet and cancels the transaction.The seller refuses to lower the price when the appraisal comes in lower than the amount set in the appraisal contingency.The buyer gets cold feet and cancels the transaction on the day of closing.Jeung gave her agent an earnest money check, and the seller accepted Jeung's offer. What will happen to the check now?An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied.Her agent will hold the check in the firm's operating account until Jeung's offer is accepted.Jeung's agent will transfer the funds to the seller.The seller's agent will deposit the funds in his operating account until closing.An escrow agent will hold the funds in a trust account until the agreement's terms are satisfied.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?BrandonGretaNelsonRigby Rigby Katherine is a buyer in Michigan. She made an offer on a property and provided a deposit check on Tuesday. The seller accepted the offer on Wednesday. What happens to Katherine's check?It must be deposited by end of day Friday.It must be deposited by end of day Thursday.It must be deposited by end of day Wednesday.It must be returned to Katherine by Friday.It must be deposited by end of day Friday.If a deposit check is related to an offer to buy property, the broker can wait to deposit it until the offer is accepted or rejected. If accepted, the broker has two banking days to make the deposit.Which of the following statements about escrow accounts is correct?An escrow account is a temporary account that's opened for use with a single transaction and closed after