What action must a real estate broker take upon receiving an earnest money deposit?

When a real estate broker receives an earnest money deposit, the correct action is to deposit it in a trust or escrow account within one business day. This requirement is in place to ensure that the funds are handled appropriately and securely, adhering to the regulations set forth by the Indiana Real Estate Commission.

The use of a trust or escrow account is crucial because it separates the funds from the broker's personal finances, providing protection for both the buyer and seller. This practice helps prevent any potential misuse of the funds, as they are held in a designated account specifically for real estate transactions.

Additionally, the one-business-day timeframe is enforced to ensure that the funds are managed promptly, which is an important aspect of maintaining trust and transparency in real estate transactions. It reflects the professionalism and fiduciary responsibility that brokers hold toward their clients.

By adhering to this practice, brokers comply with statutory requirements, fostering trust in the real estate profession and protecting the interests of all parties involved in the transaction.