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What is the general rule on how quickly a broker must deposit trust funds such as earnest money?

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Correct answer

Within the short time frame set by state law — often a small number of business days after receipt or acceptance — into the brokerage trust account

  1. A Within the short time frame set by state law — often a small number of business days after receipt or acceptance — into the brokerage trust account
  2. B Whenever convenient, with no deadline
  3. C After closing only
  4. D Only at the end of the month

Why this is the answer

States set deadlines requiring a broker to deposit trust funds, such as earnest money, into the brokerage trust (escrow) account promptly — frequently within a small number of business days after the broker receives the funds or after the contract is accepted, depending on the state. Holding funds beyond the deadline, depositing them late, or keeping them in a non-trust account are violations. The exact number of days and the trigger (receipt versus acceptance) vary by state, so brokers must know their own rule, but the principle that trust funds must be deposited quickly into a proper trust account, not held or delayed, is consistent across the state broker portion.
Source: Trust Account Deposit Timing

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About this topic: Trust Account Management

Trust account management questions cover the state's rules on opening and maintaining trust accounts, deposit deadlines, disbursement, reconciliation, audits and the penalties for mishandling funds. This is one of 12 Broker (State Law) questions on trust account management, each with a full explanation on a single study page.

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State-specific guides

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