Affiliate Broker Tennessee (TN PSI) National Practice Exam `

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the Affiliate Broker Tennessee National Exam. Practice with flashcards and multiple choice questions, with hints and explanations. Prepare well for your licensing exam!

Practice this question and more.

What violation is Frances guilty of by depositing an earnest money check into her personal account?

Embezzlement
Commingling
Fraud
Misrepresentation

The correct answer is: Commingling

Depositing an earnest money check into her personal account constitutes commingling, which is a serious violation in real estate practices. Commingling occurs when a licensed real estate agent or broker mixes their own personal funds with client funds, such as earnest money. In real estate transactions, earnest money is meant to be held in trust for the client, ensuring that it is safeguarded and handled according to the terms of the purchase agreement. By placing these funds into her personal account, Frances mismanages client money, which can lead to legal consequences and a breach of ethical standards within the industry. Understanding this concept is crucial for anyone in real estate, as maintaining clear boundaries between personal finances and escrow or client funds is fundamental to both legal compliance and professional integrity.