Virginia State Real Estate Exam Practice Question
Broker receives earnest money $10,000 and later withdraws $7,000 to operating account. This transaction is:
Correct Answer: C
Rationale: Withdrawing earnest money from an escrow account for operating expenses constitutes illegal conversion of funds. This is because earnest money is meant to secure a transaction and must be held in trust until the deal closes or is otherwise resolved.
Option A is incorrect; entitlement to a commission does not grant the broker authority to withdraw earnest money. Option B is misleading; while this action violates trust account regulations, it is not specifically a federal regulation issue. Option D is also incorrect; informing the seller does not legitimize the broker's unauthorized withdrawal of funds.
Unlock All Questions
Subscribe to Premium for full access to all practice questions, detailed rationales, and performance tracking.
Subscribe Now