Client and earnest money funds must be kept in the broker's trust/escrow account.
Before you read
Test yourself first: 5 questions
Question 1 of 5
What is the key difference between a Wisconsin real estate salesperson license and a broker license?
Answer: B. A salesperson in Wisconsin must be employed by or associated with a licensed broker and act under that broker's supervision. A broker may operate independently, hold client funds in trust, and supervise salespersons. A salesperson cannot operate on their own account.
Question 2 of 5
A Wisconsin salesperson is found to have repeatedly commingled client trust-account funds with personal money. Which disciplinary sanction is the Real Estate Examining Board authorized to impose?
Answer: B. For prohibited conduct such as commingling, the Examining Board may reprimand the licensee, limit, suspend, or revoke the license, and impose forfeitures. The Board is an administrative body and cannot impose criminal jail sentences, and discipline does not require a prior civil judgment.
Question 3 of 5
A Wisconsin firm receives an earnest-money check from a buyer. By when must the broker deposit those funds into the firm's trust account?
Answer: A. Under Wisconsin DSPS trust-account rules, earnest money and other trust funds must be deposited promptly, by the end of the next business/banking day after the firm receives them, unless the offer to purchase or written agreement directs the funds be held differently. Prompt deposit prevents commingling and protects client money.
Question 4 of 5
Which practice constitutes prohibited commingling under Wisconsin trust-account rules?
Answer: A. Commingling is mixing client trust funds with the broker's own money. Putting earnest money into the firm's operating account is classic commingling. Wisconsin permits a limited amount of the broker's own funds in the trust account only to keep it open and cover service charges; that narrow exception is not commingling.
Question 5 of 5
A Wisconsin broker uses a client's earnest-money deposit to pay the firm's office rent, intending to replace it before closing. This is BEST described as:
Answer: A. Using trust funds for the broker's own purposes, even temporarily and even if the broker plans to repay, is conversion. Conversion is a serious license-law violation in Wisconsin regardless of intent to restore the money. Trust funds must remain available for the client/transaction.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- Most sellers must provide a Real Estate Condition Report (RECR) to buyers.
- The condition report discloses known material defects in the property.
- Salesperson pre-license requirement: 72 hours of education.
- Wisconsin is a community (marital) property state under the Marital Property Act.
- Client and earnest money funds must be kept in the broker's trust/escrow account.
- Salespersons turn over funds to the broker; they do not hold escrow personally.
- Commingling client funds with personal or business funds is prohibited.
Wisconsin Disclosures, Trust Funds & Key Numbers Cheat Sheet: FAQs
Is Wisconsin Disclosures, Trust Funds & Key Numbers Cheat Sheet on the real estate exam?
Yes. State License Law is a scored domain on the Wisconsin 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 Wisconsin test this differently?
Wisconsin applies its own license law on top of the national portion. This page covers the Wisconsin rules specifically, which is what the state section of your exam tests.
