Upon receiving an earnest money deposit, a broker in South Dakota must do what?

When a broker in South Dakota receives an earnest money deposit, the proper procedure is to deposit it in a special escrow account. This practice ensures that the funds are kept separate from the broker's personal or business funds, providing protection for both the buyer and the seller during the real estate transaction. Escrow accounts are designated for holding such deposits until the transaction is finalized, ensuring that the earnest money is used appropriately according to the terms of the agreement.

By placing the earnest money in an escrow account, the broker demonstrates responsible handling of the funds and adherence to legal and ethical standards. This practice also helps to provide clarity and trust among the parties involved in the transaction, as it guarantees that the money will not be misused and will be available for the appropriate purposes as outlined in the purchase agreement.