Exam vocabulary
Brokerage Operations Glossary
9 Brokerage Operations terms the exam expects you to know, in plain English.
- Broker Price Opinion (BPO)
- A broker's informal estimate of a property's value, distinct from a formal appraisal performed by a licensed appraiser.
- Commingling
- The illegal mixing of client trust funds with a brokerage's own operating funds.
- Conversion
- The illegal, unauthorized use of client trust funds for the broker's own purposes.
- Designated (Managing) Broker
- The broker legally responsible for supervising a brokerage's affiliated licensees and their real estate activities.
- Errors and Omissions (E&O) Insurance
- Professional liability insurance protecting real estate licensees against claims of negligence or mistakes.
- Independent Contractor
- A worker classification commonly used for real estate agents, who control their own hours and are paid on commission.
- Qualifying Broker
- The individual broker whose license allows a real estate business entity to operate and hold licenses.
- Real Estate Recovery Fund
- A state-maintained fund that compensates consumers who suffer financial loss due to licensee misconduct, when other remedies are exhausted.
- Trust Account
- A separate bank account brokers use to hold client funds, kept apart from the brokerage's own money.
Study the concepts behind these terms: Brokerage Operations study guide
Freehold is an independent study resource and is not affiliated with, endorsed by, or sponsored by PSI, Pearson VUE, or any state real estate licensing board or commission. Freehold does not guarantee passage of any licensing exam.