Which action is required when earnest money is accepted?

When earnest money is accepted, it is required to be deposited into a trust fund immediately. This requirement ensures that the funds are managed properly and are used solely for their intended purpose in the transaction. By placing the earnest money in a trust account, it protects both the buyer's and seller's interests, ensuring that the money is handled in accordance with state laws and regulations.

Trust accounts provide a level of security and accountability. Real estate agents and brokers are usually obligated to follow specific guidelines governing the handling of earnest money, including timely deposits and proper record-keeping. This practice serves to build trust in the transaction process and helps to avoid any potential conflicts or disputes between the parties involved.

Holding earnest money in an agent's personal account or allowing the agent to keep it indefinitely would violate ethical standards and regulatory compliance, potentially leading to legal issues. Similarly, while there may be circumstances under which earnest money can be returned to the buyer, it must be done according to agreed terms and conditions, not at the agent’s discretion.