Contracts, Finance, and Transfer Practice Question
Question
A property manager asks how a rule affects a rental property for the Washington Real Estate Broker Exam involving earnest money and Washington broker licensing structure. Which answer best reduces risk? (Item 116)
Answer choices
- A. Client funds may be mixed with business funds if the broker reconciles the account later.
- B. The issue can be ignored if the parties want to close quickly.
- C. The rule applies only to commercial transactions and never to residential transactions.
- D. Recognize deposit handling and contract default implications in a way that fits Washington exam practice.
Correct Answer
D. Recognize deposit handling and contract default implications in a way that fits Washington exam practice.
Explanation
The correct answer is D because earnest money requires candidates to recognize deposit handling and contract default implications. The Washington 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