Client/escrow money must be held in a designated trust account, not commingled with broker funds.
Before you read
Test yourself first: 5 questions
Question 1 of 5
After receiving the seller's completed Form 17, a Washington buyer generally has a statutory right to do what?
Answer: B. Once the buyer receives Form 17, the buyer has a statutory rescission window (commonly three business days) to disapprove the disclosures and rescind the agreement.
Question 2 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 3 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 4 of 5
In Washington, depositing a client's earnest money into the brokerage's general operating account along with the firm's own money is BEST described as:
Answer: B. Commingling is the prohibited mixing of client trust funds with the broker's or firm's own funds. Conversion is the more serious act of actually using or taking the client's funds for one's own purposes.
Question 5 of 5
A Washington broker, short on cash, withdraws $2,000 from the firm trust account to pay a personal bill, intending to repay it before anyone notices. This act is MOST accurately characterized as:
Answer: C. Using trust funds for personal purposes is conversion, regardless of intent to repay. It is among the most serious violations and can result in license revocation and criminal liability.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Seller disclosure: Form 17 (Seller Disclosure Statement) is provided to buyers of residential property.
- Form 17 covers the property's condition (title, water, sewer, structure, systems, environmental, and more).
- Property regime: Washington is a COMMUNITY PROPERTY state.
- Client/escrow money must be held in a designated trust account, not commingled with broker funds.
- Trust funds must be accurately accounted for and promptly deposited/handled per WA rules.
- Pre-license education: 90 hours (60 Fundamentals + 30 Practices).
- License renewal: every 2 years, with required continuing education.
- Entry license = Broker; supervisor license = Managing Broker; oversight by DOL.
Washington Disclosures, Trust Funds & Key Numbers Cheat Sheet: FAQs
Is Washington Disclosures, Trust Funds & Key Numbers Cheat Sheet 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.
