Broker fees deposited with the broker before they are earned are called:
Question & Answer
Review the question and all answer choices
kickbacks.
Kickbacks are illegal payments made to induce referrals of business, often in exchange for something of value. They violate California's Real Estate Law and are prohibited, making this option incorrect as it represents an illegal practice rather than a legitimate fee type.
advance fees.
Advance fees are payments made for services to be performed in the future, but they are not specifically the term used for broker fees deposited before being earned in the context of referral arrangements. This term is broader and not as precise as referral fees.
referral fees.
duplicate charges. Simulated Exam #2 199
Duplicate charges refer to incorrectly billing for the same service twice, which is an error in accounting rather than a type of fee. This represents an improper practice rather than a legitimate category of broker fees.
Why is this correct?
Referral fees are the correct answer because they represent compensation paid to one broker for referring a client to another broker who actually completes the transaction. These fees are deposited before being earned and are a legitimate part of real estate business when properly disclosed and compliant with regulations.
Continue Learning
Explore this topic in different formats
More Agency Law Videos
Continue learning with related video lessons
Ohio's continuing education requirement for license renewal is:
2:14 • 0 views
Ohio real estate licensees are regulated by the:
2:51 • 0 views
A seller's agent in Texas owes which duty to buyers?
2:47 • 0 views
South Dakota requires how many hours of pre-license education?
3:19 • 0 views
Which Illinois agency fiduciary duty survives beyond the end of an agency relationship?
2:17 • 0 views
Ready to Ace Your Real Estate Exam?
Access 2,000+ free video lessons covering all 11 exam topics.