What does ‘commingling’ refer to in real estate transactions?

Commingling in real estate transactions refers to the act of mixing client funds with personal funds. This practice is ethically and legally problematic because it can lead to confusion regarding the ownership of those funds and can also expose the agent or broker to liability. Real estate professionals are required to keep client funds, such as earnest money deposits, in a trust account that is separate from their personal or business operating accounts. This separation ensures that client money is protected and can be accounted for properly at all times.

Maintaining clear boundaries between personal and client funds fosters trust and transparency in real estate transactions, which are essential qualities for successful client relationships and compliance with regulatory standards.