Tennessee Realtor State Practice Exam

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Prepare for the Tennessee Realtor State Exam. Use flashcards and multiple-choice questions, each with hints and explanations. Ensure your success!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What is the first step a firm must take if it intends to accept escrow funds?

Notify the commission
Open the escrow account
Deposit the funds
Complete a compliance checklist

The correct answer is: Open the escrow account

The correct answer is the option indicating that the firm must open the escrow account first. Before any funds can be accepted and held in escrow, a dedicated escrow account must be established where these funds will be securely held. This is a crucial initial step as it ensures that the funds are managed separately from the firm's operating accounts, maintaining the integrity and security of the funds belonging to clients. Having an escrow account in place is also essential for compliance with state regulations governing the handling of client funds. It demonstrates that the firm is prepared to operate within the legal framework and is accountable for managing those funds appropriately. Once the escrow account is opened, the firm can then notify the commission, deposit the funds, and complete any additional compliance requirements or checklists necessary to ensure full adherence to regulatory standards.