Contracts, Finance, and Transfer Practice Question
Question
A buyer asks a licensee for an exam-focused explanation for the Michigan Real Estate Salesperson Exam involving escrow and seller disclosure practice. Which statement is most accurate for exam purposes? (Item 34)
Answer choices
- A. Client funds may be mixed with business funds if the broker reconciles the account later.
- B. Identify neutral handling of funds and documents under written instructions in a way that fits Michigan exam practice.
- C. The issue can be ignored if the parties want to close quickly.
- D. The rule applies only to commercial transactions and never to residential transactions.
Correct Answer
B. Identify neutral handling of funds and documents under written instructions in a way that fits Michigan exam practice.
Explanation
The correct answer is B because escrow requires candidates to identify neutral handling of funds and documents under written instructions. The Michigan reference keeps the scenario tied to state licensing practice, while the other options rely on unsafe assumptions about oral custom, escrow, client preference, independent licensee authority, or ignoring written duties.
Question details
- Difficulty: medium
- Domain: Contracts, Finance, and Transfer
- Objective: escrow