What does commingling refer to in real estate transactions?

Commingling refers to the improper act of mixing a broker's personal or business funds with the funds that belong to clients. In real estate transactions, it is crucial to keep client funds separate to ensure accountability and to prevent any potential misuse of those funds. This separation helps protect both the client and the broker by maintaining an organized and transparent handling of financial resources.

In contrast, keeping client funds separate in an account, depositing funds into escrow, or transferring funds to a closing agent—if done correctly—are all acceptable practices that support the integrity of financial transactions in real estate. These actions uphold fiduciary responsibilities and ensure that client assets are managed appropriately without the risk of commingling, which could lead to legal issues or disputes.