Illinois Real Estate Exam Practice Question
In Illinois, a broker who owns a real estate company places the money from an earnest money deposit in the company’s operating account. Which of the following statements is true in this situation?
Correct Answer: B
Rationale: In this scenario, placing earnest money deposits in the company's operating account constitutes commingling, which is the mixing of client funds with personal or business funds. This practice is prohibited as it can lead to mismanagement of client money.
Option A is incorrect; the procedure is not acceptable due to the risk of commingling. Option C is irrelevant; a referral fee pertains to compensation for services and does not apply here. Option D is misleading; using collateral refers to securing a loan, which is not applicable to this situation. Thus, the broker's action directly violates regulations regarding the handling of earnest money.
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