What does trust accounting involve in real estate?

Trust accounting involves the obligation of real estate professionals to manage client funds with transparency and fidelity. This means that all funds received on behalf of clients must be carefully tracked and protected, ensuring that they are used solely for their intended purposes. Trust accounts are established to hold these funds separately from the real estate agent's personal finances, safeguarding the clients' interests and providing a clear audit trail.

In the practice of trust accounting, real estate professionals are required to follow strict regulations and ethical standards to maintain the integrity of these funds. This includes keeping accurate records, reconciling accounts regularly, and providing clients with clear documentation of all transactions. By managing client funds responsibly, agents uphold their fiduciary duty, which is fundamental to maintaining trust in the client-agent relationship.