Minnesota State Real Estate Practice Test

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Study for the Minnesota Real Estate Exam. Use flashcards and multiple-choice questions with hints and explanations. Get exam-ready efficiently!

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What must a salesperson do with client funds they receive?

Invest it for the client
Hold it for personal use until instructed
Immediately turn it over to the employing broker
Keep it until the transaction is complete

The correct answer is: Immediately turn it over to the employing broker

The correct answer reflects the practice that real estate salespersons must follow regarding client funds. When a salesperson receives any funds from a client, such as earnest money or deposits, they are required to immediately turn that money over to their employing broker. This is essential to ensure that all client funds are handled according to regulatory standards and to maintain proper record-keeping. This requirement protects both the client and the salesperson by ensuring that funds are managed by the broker's office, where they can be securely held in a trust account, separate from the broker's business accounts. This separation helps prevent any potential misuse of funds and upholds the ethical standards of the real estate profession. In contrast, investing the funds for the client or holding the funds for personal use would violate legal and ethical obligations. Keeping the funds until the transaction is complete could also create issues, as it might lead to potential disputes over fund management and could jeopardize the integrity of the transaction. Thus, the requirement to immediately turn funds over to the employing broker is designed to safeguard client interests and ensure compliance with real estate laws and regulations in Minnesota.