Tennessee Real Estate License Exam Practice Question
An affiliate broker who operates as an independent contractor for a broker is seldom in the office. Earnest money deposits received by this affiliate broker
Correct Answer: B
Rationale: Earnest money deposits are crucial in real estate transactions, serving as a sign of the buyer's commitment. Option B is accurate because these funds should be transmitted to the principal broker immediately after receipt to ensure proper handling and compliance with legal requirements.
Option A is incorrect; affiliate brokers cannot independently open escrow accounts for earnest money. Option C misrepresents the regulations, as there is no allowance for holding deposits for 3 business days without notifying the broker. Option D is misleading; returning the deposit to the buyer undermines the purpose of the earnest money and does not follow established protocols.
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