When may an escrow company disburse commissions directly to a broker's salesperson?

When may an escrow company disburse commissions directly to a broker's salesperson?

• A. If the salesperson's license is inactive
• B. If the escrow officer receives written authorization from the broker in each transaction
• C. If the escrow agent is also a licensed broker
• D. If the broker gives written authorization to the escrow company annually

Answer: (B)

The correct choice is based on the requirement for written authorization from the broker in each transaction. An escrow company acts as a neutral third party in a real estate transaction, managing the disbursement of funds, including commissions, to various parties involved. In Arizona, for a salesperson to receive their commission directly from the escrow company, the broker, who is legally responsible for the actions of their salespersons, must provide specific written authorization for that transaction. This ensures that the broker is aware of and approves the distribution of funds, maintaining proper oversight and compliance with state regulations. This practice is important for protecting all parties involved in the transaction and upholding the integrity of the commission payment process. Without this written authorization for each transaction, the escrow company would not be compliant with Arizona real estate laws, which emphasize the broker's role in overseeing commission payments.

The correct choice is based on the requirement for written authorization from the broker in each transaction. An escrow company acts as a neutral third party in a real estate transaction, managing the disbursement of funds, including commissions, to various parties involved.

In Arizona, for a salesperson to receive their commission directly from the escrow company, the broker, who is legally responsible for the actions of their salespersons, must provide specific written authorization for that transaction. This ensures that the broker is aware of and approves the distribution of funds, maintaining proper oversight and compliance with state regulations.

This practice is important for protecting all parties involved in the transaction and upholding the integrity of the commission payment process. Without this written authorization for each transaction, the escrow company would not be compliant with Arizona real estate laws, which emphasize the broker's role in overseeing commission payments.