National Brokerage Unit 7 Quiz

What is the legal requirement regarding the number of escrow accounts that can be opened?

No limit

When must an escrow account be interest bearing?

When all parties make the request

Most states require that the sponsoring broker reconcile an escrow account

based on a monthly bank statement.

A sponsoring broker must keep all escrow records for

3-5 years

Sponsoring Broker Jones received an order from a court of competent jurisdiction directing the disbursement of the escrow moneys. What action should broker Jones take?

Broker Jones must disburse the escrow moneys according to the terms of the order.

Earnest money is usually made in the form of a

Check

Which of the following statements is TRUE?

Earnest money is not required for a contract to be valid.

What happens to escrow monies when the parties are unable to reach a resolution?

Funds are held in a state escrow account for six months then are turned over to the State Treasurer.

Buyer Jim put down a deposit in the form of a boat title worth $5,000. The boat is owned by Jim's parents. The transaction was not completed, who should the boat title be returned to?

Jim

What document is used to show the chronological sequence in which funds are received and disbursed by the sponsoring broker?

Journal

Where would you find every escrow entry showing the running balance after each receipt or disbursement?

Journal

Where would you find the names of all parties to a transaction, the amount of escrow funds the sponsoring broker received, and the date the broker received the funds?

Ledger

What log includes all escrow bank account numbers?

Master Escrow Account Log

Under what conditions might a broker hold an authorized disbursement of escrow moneys claim?

Never

Which of the following statements best describes an authorized disbursement?

One which is made on behalf of, and at the written direction of, all principals to the transaction or their duly authorized agents

Which of the following statements is TRUE regarding earnest money?

Personal property can be offered as an earnest deposit.

All licensees should give earnest money checks to their sponsoring broker immediately who must deposit said earnest money by

The next business day of contract acceptance

Broker John received three earnest money checks on Friday. The upcoming Monday is a holiday. When is Broker John required to make an escrow deposit?

Tuesday

All non-interest bearing escrow accounts

must be maintained at a federally-insured depository.

Brokers who are responsible for earnest money deposits for property sales (and security deposits for leases

must open special trust (or escrow) accounts in which to deposit the funds they have been given.

If any dispute between the parties arises regarding the deposited escrow money, the sponsoring broker should

not release the money without a written release from both parties or both parties' duly authorized agents (power of attorney or attorney at law).

The sponsoring broker must keep all escrow moneys

on deposit in an escrow account until a transaction is consummated or terminated.