Before you read
Test yourself first: 5 questions
Question 1 of 5
A Washington broker deposits an earnest money check into the broker's personal checking account 'just temporarily' until the transaction closes. This conduct is BEST described as:
Answer: A. Mixing client or trust funds (such as earnest money) with the broker's own personal or business funds is commingling, which is prohibited under Washington license law. Earnest money must be handled through a proper trust/escrow account, and commingling can result in disciplinary action regardless of whether the funds were later returned.
Question 2 of 5
A managing broker receives an earnest-money check made payable to the firm in a transaction handled by one of the firm's brokers. Under Washington trust-account rules, where must these client funds be held pending closing?
Answer: B. Washington requires client money such as earnest money to be deposited into a real estate trust account maintained by the firm and held in trust for the parties. It cannot be placed in operating funds or personal accounts, which would constitute commingling.
Question 3 of 5
How long must a Washington real estate firm generally retain transaction and trust-account records after a transaction closes or fails?
Answer: C. Washington requires firms to retain real estate transaction and trust-account records for at least three years, available for inspection by the Department of Licensing.
Question 4 of 5
Who is responsible for supervising a Washington broker's trust-account handling and brokerage activities at the firm?
Answer: B. In Washington, a managing broker (often the designated broker for the firm) is responsible for supervising brokers, including their handling of trust funds and transactions, consistent with the broker/managing broker structure.
Question 5 of 5
When may a Washington firm act as a limited dual agent representing both buyer and seller in the same transaction?
Answer: B. Washington permits limited dual agency only when both the buyer and seller give written consent after disclosure of the dual-agent role.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
Because Washington is a community property state, property acquired by spouses during marriage is generally owned jointly, which affects who must sign to convey or encumber title. Client and earnest-money funds must be deposited promptly into a designated trust account and never commingled with the broker's own funds. Brokers must disclose known material facts affecting the transaction to the parties.
Washington Contract & Transaction Specifics: FAQs
Is Washington Contract & Transaction Specifics on the real estate exam?
Yes. State License Law is a scored domain on the Washington 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 Washington test this differently?
Washington applies its own license law on top of the national portion. This page covers the Washington rules specifically, which is what the state section of your exam tests.
