Questions and Answers
Because the real estate housing market is varied in nature and deals with many different types of desires and needs, it is said to be ________?
stratified
What is the desk cost for a broker?
The total current cost including salaries paid to the office manager and receptionist decided by the number of agents in the office.
Commingling is most nearly the opposite of ______?
segregate
What does commingling refer to?
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What act best describes conversion in real estate?
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What is conversion in a real estate context?
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In the case where a broker loses a deposit check made payable to the seller, who bears the risk?
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Which of the following could be used by a buyer as an earnest money deposit in purchasing real property? (Select all that apply)
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When using a note as a deposit from a buyer in making an offer, what should the agent inform the seller?
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What should an agent do if a buyer instructs to hold a check until a future date?
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If a buyer's offer states that their check is to be held uncashed until closing, what should the broker do?
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What should Broker Brown do when accepting a deposit from Charles Cable for Blackacre?
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Can a real estate agent use trust account funds for repairs on a managed house?
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Who must sign for withdrawals from a real estate broker's trust account?
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Study Notes
Real Estate Concepts and Terminology
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Stratified Housing Market: Refers to the varied nature of the real estate housing market, addressing different types of desires and needs, including residential, business, investment, agriculture, and industrial purposes.
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Desk Cost for Brokers: Comprises total current costs, including salaries for office management, calculated based on the number of agents in the office.
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Commingling vs. Segregate: Commingling involves mixing funds, which is the opposite of segregating, or keeping funds separate.
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Definition of Commingling: The blending or mixing of funds, often seen as a violation of ethical standards in real estate.
Conversion in Real Estate
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Definition of Conversion: Refers to the misappropriation and personal use of another's funds, a more severe offense than commingling.
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Example of Conversion: If a salesperson spends a buyer's deposit on personal expenses before the offer is accepted, it constitutes conversion.
Handling Deposits in Real Estate Transactions
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Broker's Risk with Lost Deposits: A broker authorized to accept deposits assumes the risk of loss of the deposit if it was lost due to negligence, impacting the seller.
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Acceptable Earnest Money Deposits: Buyers in real estate can use various forms such as postdated checks, unsecured promissory notes, or promissory notes secured by deeds of trust as earnest money deposits.
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Note as Deposit: Agents must inform sellers when deposits are in the form of notes before the seller accepts the offer.
Trust Accounts and Their Management
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Trust Account Benefits: Trust accounts benefit both the beneficiary and the trustor, do not require a minimum balance, and may not earn interest under current law. They protect the interests of all parties in a transaction.
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Holding Checks as Agent: If an agent holds a buyer's check to be cashed later, they must inform the seller and obtain consent before acceptance.
Broker Responsibilities
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Accepting Deposits Without Authorization: A broker can accept a buyer’s deposit as their agent and place it in a buyer's trust fund if not explicitly prohibited by the seller.
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Use of Trust Account Funds: Trust account funds may be used for necessary repairs on properties managed by the broker, ensuring benefits go to involved parties only.
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Withdrawal Restrictions: Withdrawals from a broker's trust account require the broker's signature or those of authorized personnel, ensuring accountability.
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Description
Test your knowledge on key real estate concepts with this flashcard quiz based on Lesson One. From understanding the stratification of the housing market to knowing brokers' desk costs, this quiz is perfect for anyone looking to sharpen their real estate vocabulary. Get ready to enhance your expertise in the field!