Contracts, Finance, and Transfer Practice Question
Question
A broker is correcting a new licensee’s misunderstanding for the Pennsylvania Real Estate Salesperson Exam involving earnest money and state agreement and disclosure practice. Which statement is the best answer? (Item 98)
Answer choices
- A. The rule applies only to commercial transactions and never to residential transactions.
- B. Recognize deposit handling and contract default implications in a way that fits Pennsylvania exam practice.
- C. Client funds may be mixed with business funds if the broker reconciles the account later.
- D. The issue can be ignored if the parties want to close quickly.
Correct Answer
B. Recognize deposit handling and contract default implications in a way that fits Pennsylvania exam practice.
Explanation
The correct answer is B because earnest money requires candidates to recognize deposit handling and contract default implications. The Pennsylvania 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: earnest money