Unit 1: Brokerage and Broker Responsibilities Flashcards

1
Q

What is a broker’s #1 responsibility?

A

SUPERVISION

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2
Q

How many years does a broker need to retain copies of all listings, deposit receipts, cancelled checks, and trust account records?

A

6 years

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3
Q

Besides supervision, what is another responsibility of a broker?

A

To deliver documents to all parties upon signing or as soon as possible.

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4
Q

What kind of account do brokers need to maintain for the deposit of trust funds?

A

An interest-bearing demand account that pays the highest rate of interest.

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5
Q

Who receives the interest earned from trust accounts?

A

The Minnesota Housing Trust Fund

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6
Q

What can be deposited into trust funds?

A
  1. Down payments
  2. Earnest money
  3. Rents & security for clients (property managers)
  4. Damage/security deposits
  5. Tax & Insurance escrow payments
  6. Any funds received on behalf of any person
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7
Q

When does earnest money need to be deposited?

A

By the 3rd business day after receipt.

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8
Q

T/F Earnest money is typically deposited when the offer becomes an executory (accepted) contract.

A

True

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9
Q

What are trust funds?

A

Money received by a broker or salesperson on behalf of a client or any other person in real estate transactions.

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10
Q

If an offer is rejected, when does the earnest money need to be returned to the buyer?

A

By the next business day.

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11
Q

Can a buyer use a promissory note instead of earnest money.

A

Yes but they must obtain the seller’s approval first.

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12
Q

T/F Brokers can deposit commission checks in the trust account.

A

False

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13
Q

If a broker is to close a trust account, how many days notice do they need to give the Commissioner?

A

10 days

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14
Q

T/F Sellers/buyers and landlords/tenants can pay both the broker and the salesperson.

A

False. They only pay the broker.

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