Unit 1: Brokerage and Broker Responsibilities

Question 1

What is a broker’s #1 responsibility?

Answer 1

SUPERVISION

Question 2

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

Answer 2

6 years

Question 3

Besides supervision, what is another responsibility of a broker?

Answer 3

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

Question 4

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

Answer 4

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

Question 5

Who receives the interest earned from trust accounts?

Answer 5

The Minnesota Housing Trust Fund

Question 6

What can be deposited into trust funds?

Answer 6

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

Question 7

When does earnest money need to be deposited?

Answer 7

By the 3rd business day after receipt.

Question 8

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

Answer 8

True

Question 9

What are trust funds?

Answer 9

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

Question 10

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

Answer 10

By the next business day.

Question 11

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

Answer 11

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

Question 12

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

Answer 12

False

Question 13

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

Answer 13

10 days

Question 14

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

Answer 14

False. They only pay the broker.