Contracts, Finance, and Transfer Practice Question
Question
A supervising broker is reviewing a transaction file for the North Carolina Real Estate Broker Exam involving earnest money and provisional broker supervision. What should the licensee understand? (Item 80)
Answer choices
- A. The issue can be ignored if the parties want to close quickly.
- B. The rule applies only to commercial transactions and never to residential transactions.
- C. Client funds may be mixed with business funds if the broker reconciles the account later.
- D. Recognize deposit handling and contract default implications in a way that fits North Carolina exam practice.
Correct Answer
D. Recognize deposit handling and contract default implications in a way that fits North Carolina exam practice.
Explanation
The correct answer is D because earnest money requires candidates to recognize deposit handling and contract default implications. The North Carolina 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: hard
- Domain: Contracts, Finance, and Transfer
- Objective: earnest money