What does commingling in real estate refer to?

Commingling in real estate refers specifically to mixing personal funds with funds belonging to others, particularly clients. This practice is important to understand because it can lead to significant legal and ethical issues for real estate professionals. When a broker or agent combines their personal money with client funds, such as earnest money deposits or trust account funds, it can result in a breach of fiduciary duty. This separation of funds is critical to maintain transparency and trust in business transactions, ensuring that clients' funds are safeguarded and properly managed. Understanding the implications of commingling helps real estate professionals adhere to the legal standards and ethical guidelines established in the industry.