Contracts, Finance, and Transfer Practice Question
Question
A broker is correcting a new licensee’s misunderstanding for the Utah Real Estate Sales Agent Exam involving earnest money and sales agent brokerage affiliation. Which answer best reduces risk? (Item 26)
Answer choices
- A. Client funds may be mixed with business funds if the broker reconciles the account later.
- B. Recognize deposit handling and contract default implications in a way that fits Utah 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. Recognize deposit handling and contract default implications in a way that fits Utah exam practice.
Explanation
The correct answer is B because earnest money requires candidates to recognize deposit handling and contract default implications. The Utah 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