Earnest money and client funds must be deposited in the broker's escrow/trust account, kept separate from personal funds.
Before you read
Test yourself first: 5 questions
Question 1 of 5
How are real estate trust (escrow) funds, such as earnest money, generally required to be handled by a Missouri broker?
Answer: B. Missouri brokers must deposit and hold client and customer money, such as earnest money, in a separate escrow or trust account. Commingling trust funds with the broker's own operating or personal funds is prohibited.
Question 2 of 5
In Missouri, which licensee bears ultimate responsibility for the proper handling and accounting of escrow/trust funds held by the brokerage?
Answer: C. The broker is ultimately responsible for the brokerage's escrow/trust account and for the proper deposit, accounting, and disbursement of trust funds. A salesperson who receives earnest money must promptly deliver it to the broker, but the broker retains responsibility.
Question 3 of 5
Which act by a Missouri broker with respect to client trust funds is expressly prohibited?
Answer: C. Commingling, mixing client trust funds with the broker's own personal or business funds, is prohibited. Maintaining a separate escrow account, keeping accurate records, and disbursing per the parties' agreement are all proper practices.
Question 4 of 5
A Missouri broker is the subject of an MREC investigation into alleged mishandling of funds. Which statement about the Commission's investigative authority is correct?
Answer: A. As part of enforcing the license law, MREC may investigate complaints and examine a licensee's books, records, and trust/escrow accounts. Discipline must follow due process (notice and hearing rights through the AHC process); the Commission cannot revoke a license arbitrarily without that process.
Question 5 of 5
A Missouri salesperson deposits an earnest money check into his personal checking account 'just to keep it safe' until closing. This conduct is BEST described as:
Answer: B. Client and customer funds (such as earnest money) must be held in the broker's trust/escrow account, not mixed with personal or business operating funds. Placing trust money in a personal account is commingling (and potentially conversion), which is prohibited and a basis for MREC disciplinary action.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Salesperson education requirement: 72 hours total (48-hour pre-exam + 24-hour Missouri Real Estate Practice).
- Sellers should disclose known material defects affecting the property's value or desirability.
- Federal lead-based paint disclosure applies to homes built before 1978.
- Missouri is NOT a community property state; marital property is handled separately.
- Earnest money and client funds must be deposited in the broker's escrow/trust account, kept separate from personal funds.
- Commingling client trust funds with the broker's own money is prohibited.
- The sponsoring broker is responsible for proper handling and recordkeeping of escrow/trust funds.
Missouri Disclosures, Escrow/Trust Funds & Key Numbers: FAQs
Is Missouri Disclosures, Escrow/Trust Funds & Key Numbers on the real estate exam?
Yes. State License Law is a scored domain on the Missouri 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 Missouri test this differently?
Missouri applies its own license law on top of the national portion. This page covers the Missouri rules specifically, which is what the state section of your exam tests.
