What must Broker Murphy do with the $5,000 earnest money received for his listing?

Broker Murphy is required to deposit the $5,000 earnest money into his company's escrow account. This is because earnest money is a deposit made to demonstrate a buyer's serious intent to purchase a property. The funds must be held in a designated escrow account until the conditions of the sale are met, at which point they could be applied toward the buyer's closing costs or returned to the buyer based on the terms of the agreement. This practice not only maintains transparency in real estate transactions but also protects the funds, ensuring they are not misused or commingled with the broker's or company’s operating funds.

Depositing the earnest money into an account that is not specifically designated for escrow purposes, such as an operating account or a personal account, would be considered a violation of trust and professional ethics, as it can lead to legal issues and potential loss of funds. Therefore, the requirement for Broker Murphy to use the escrow account is integral to proper and ethical handling of client funds within the real estate industry.