What must brokers do when a buyer's earnest money is received?

When a broker receives a buyer's earnest money, the correct action is to deposit it into a trust account within a specified time frame. This requirement ensures that the funds are managed properly and securely, reflecting the fiduciary responsibility brokers have toward their clients. Trust accounts are designed to segregate client funds from the broker's own operational funds, providing transparency and ensuring that the money is used solely for the intended purposes related to the real estate transaction.

The specified time frame for depositing the earnest money is often outlined in state laws and regulations, which helps maintain accountability and protects the interests of all parties involved in the transaction. By adhering to this protocol, brokers uphold the standards of practice that are expected in the real estate industry, fostering trust and integrity in their professional dealings.