PSI Oklahoma Real Estate Practice Test

What is the primary purpose of a trust account in real estate transactions?

1. An account for depositing client funds

2. An account for personal funds of the realtor

3. An account holding commission fees only

4. An account for mortgage payments

The correct answer is: An account for depositing client funds

The primary purpose of a trust account in real estate transactions is to serve as an account for depositing client funds. Trust accounts are used by real estate professionals to hold funds collected on behalf of clients, ensuring that these funds are kept separate from the agent's or broker's personal funds. This helps to maintain a clear and ethical financial boundary, which is critical for trust and transparency in real estate transactions. Using a trust account enhances the protection of client funds, ensuring they are disbursed appropriately according to the terms of the contract or transaction. This type of account is subject to strict regulations to prevent misuse and to safeguard clients' money. By properly managing these funds within a trust account, real estate professionals uphold their fiduciary responsibilities and contribute to the overall integrity of the industry. In contrast, the other options do not capture the correct function of a trust account. Personal funds of the realtor should never be co-mingled with client funds in trust accounts. Accounts holding only commission fees and accounts for mortgage payments do not accurately describe the primary purpose of a trust account, which is fundamentally about managing client funds securely and ethically.