Wisconsin Real Estate Sales Practice Exam

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What is the primary function of a broker's trust account?

To manage personal funds of the broker
To hold client funds safely until the transaction is completed
To earn interest for the broker
To provide loans to clients

The correct answer is: To hold client funds safely until the transaction is completed

The primary function of a broker's trust account is to hold client funds safely until the transaction is completed. This is crucial in real estate transactions, as brokers often receive earnest money deposits, down payments, or other client funds during the process of buying or selling property. By placing these funds in a designated trust account, brokers can ensure that the money is kept separate from their personal or business funds, protecting it from potential misuse and ensuring that it is available when needed for the transaction. This practice also helps maintain transparency and trust between brokers and clients, as it demonstrates a commitment to fiduciary responsibility and ethical handling of client funds.