What must happen to all funds received by a real estate broker belonging to a client?

The correct answer is that all funds received by a real estate broker on behalf of a client must be placed in an escrow account. This requirement is in place to ensure that the funds are safeguarded and properly managed during a transaction. An escrow account is a neutral account that holds funds until they are needed for a specific purpose, such as completing a property sale, paying for repairs, or covering closing costs.

By depositing client funds into an escrow account, the broker ensures that the money is not at risk of being misused or intermingled with the broker's personal or operational funds. This process also helps facilitate trust in the transaction, as clients can have confidence that their money is being managed according to the terms agreed upon and regulations governing real estate practices.

Overall, the use of an escrow account is a crucial aspect of the fiduciary responsibility that a real estate broker has towards their clients, ensuring transparency and security throughout the real estate transaction process.