Before you read
Test yourself first: 5 questions
Question 1 of 5
Which of the following is a prohibited handling of client trust funds by a Massachusetts broker?
Answer: C. Commingling client trust funds with the broker's own money is prohibited. Brokers must segregate client funds in an escrow/trust account, keep records, and account for and disburse the funds per the agreement.
Question 2 of 5
Under Massachusetts brokerage practice, which licensee is ultimately responsible for ensuring escrow funds are properly held and accounted for?
Answer: A. A salesperson works under a sponsoring broker and turns deposits over to that broker. The broker is responsible for maintaining the escrow account and proper handling/accounting of the funds.
Question 3 of 5
A Massachusetts salesperson personally receives an earnest-money deposit from a buyer. What is the proper handling of that deposit?
Answer: A. Salespersons cannot hold escrow funds themselves; they must promptly turn deposits over to the sponsoring broker, who places them in the firm's escrow/trust account.
Question 4 of 5
Which of the following actions by a Massachusetts broker concerning escrow funds is MOST likely to result in disciplinary action by the Board?
Answer: A. Failing to account for or pay over money belonging to others is a classic violation that can lead to license discipline. The other choices describe proper handling of trust funds.
Question 5 of 5
When a Massachusetts broker holds a buyer's deposit pending closing, those funds must be:
Answer: B. Massachusetts brokers must hold client deposits in a separate escrow/trust account and may not commingle those funds with the broker's own money. Commingling and conversion of trust funds are serious license-law violations.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
The broker is responsible for proper handling and accounting of these monies. Real estate licenses are renewed on a recurring cycle, and licensees must complete approved continuing-education requirements to remain in good standing and keep their license active.
Handling Escrow Funds and License Renewal in Massachusetts: FAQs
Is Handling Escrow Funds and License Renewal in Massachusetts on the real estate exam?
Yes. State License Law is a scored domain on the Massachusetts real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Massachusetts test this differently?
Massachusetts applies its own license law on top of the national portion. This page covers the Massachusetts rules specifically, which is what the state section of your exam tests.
