# Real estate broker trust account reconciliation, step by step

By Rotomal team · Updated 2026-11-03 · Part of [Trust Reconciler](https://rotomal.com/trust-reconcile/)

**Short answer:** A real estate broker's trust account reconciliation compares three figures every month: the bank statement balance adjusted for outstanding checks and deposits in transit, the balance of the trust receipts-and-disbursements journal, and the total of the individual client or transaction ledgers. Oregon spells out those three parts and requires the principal broker to sign and date the result; California, North Carolina, Florida and Utah also require monthly reconciliation, and Texas requires a monthly accounting to each beneficiary when the account had activity. The duty sits with the broker, not the agent: Texas, for example, does not allow sales agents to have escrow accounts.

## The three figures a broker reconciles

- Adjusted bank balance: the statement balance, adjusted for outstanding checks and other reconciling bank items such as deposits in transit.
- Journal balance: the trust receipts and disbursements journal, or checkbook register, as of the statement closing date.
- Ledger total: the sum of the individual client, owner or transaction ledgers as of the same date.

The three must be equal. Any adjustment must be clearly identified and explained, and the principal broker verifies, signs and dates the result (Oregon's wording; other states use similar terms). California's Department of Real Estate describes the same order: reconcile the trust journal to the bank first, then compare the total of the separate beneficiary records with that adjusted balance.

## State rules for broker trust account reconciliation

| State | Rule | What it requires | Link |
| --- | --- | --- | --- |
| California | Reg. 2831.2 | Reconcile the total of the separate beneficiary records with the trust journal at least monthly, unless the account had no activity; keep a record of each reconciliation | https://www.dre.ca.gov/files/pdf/commonviolationsfoundinaudits.pdf |
| North Carolina | Commission Rule A.0117(e) | Reconcile trust records monthly and keep a worksheet for each month (NCREC bulletin, 2017) | https://bulletins.ncrec.gov/rec%C2%B7on%C2%B7cile-to-make-peace-adjust-reconcile-trust-accounts-monthly/ |
| Oregon | OAR 863-015-0275 | Principal broker reconciles each clients' trust account at least monthly, in three components, then verifies, signs and dates it (amended effective 1 January 2026) | https://secure.sos.state.or.us/oard/view.action?ruleNumber=863-015-0275 |
| Florida | Rule 61J2-14.012(2) | Monthly written statement comparing total trust liability with the reconciled bank balances; the broker reviews, signs and dates it | https://www.law.cornell.edu/regulations/florida/Fla-Admin-Code-Ann-R-61J2-14-012 |
| Texas | 22 TAC 535.146(c)(6) | An accounting to each beneficiary at least monthly if the account had any activity | https://www.trec.texas.gov/node/383 |
| Utah | R162-2f-403a(10)(d)-(e) | Reconcile trust records with the bank and with client account records at least monthly | https://www.law.cornell.edu/regulations/utah/Utah-Admin-Code-R162-2f-403a |

Florida and Utah wording was checked on Cornell LII's copy of the state code; the other rows on the regulator's own site.

## Bank reconciliation for real estate agents and brokers, step by step

- Use the bank statement's ending date, ideally month end, as the cut-off for every record.
- Tick off each deposit and check that cleared. List outstanding checks by check number, issue date, payee and amount, and list deposits in transit.
- Record any bank fee the statement shows and cover it from broker money as your state allows, never from a client's ledger. California, for example, treats more than $200 of broker funds in trust as commingling.
- Compute the adjusted bank balance and compare it with the journal balance.
- Total the client or transaction ledgers (a trial balance) and compare it with both.
- Explain and correct every difference; don't post an unexplained balancing entry.
- Have the broker sign and date the worksheet and file it with the statement and supporting documents.

## Broker commission reconciliation: statements, checks and deposits

Commission reconciliation is a different job from the trust reconciliation above, and it runs through the operating account, not the trust account. The brokerage receives commission at closing, issues each agent a commission statement (the split, any fees and the net), and pays the agent. Agents and their bookkeepers then match each statement to what actually landed in their own bank account. A monthly routine:

- List every closing in the month from the settlement statements, with the gross commission shown for your side.
- Match each closing to the brokerage's commission statement: gross, split percentage, transaction or desk fees, referral fees and the net to the agent.
- Match each net amount to a deposit in the agent's bank account. Several closings paid in one check or transfer need splitting back to the statements.
- Keep the brokerage's operating account and its trust account apart. Earned commission is broker money, and broker money left in trust can be commingling: California, for example, treats more than $200 of broker funds in a trust account as commingling.
- If one agent banks with more than one account, reconcile each account on its own and keep a single list of statements as the master record.
- Chase every gap the same month: a missing statement, a fee nobody agreed or a deposit with no closing behind it.
- At year end, compare the total paid to each agent with the 1099-NEC the brokerage will file. For commissions paid in 2026 to agents who are independent contractors, the 1099-NEC threshold is $2,000 (it was $600).

## What auditors find most often

California's Department of Real Estate publishes its ten most common audit violations. The trust-account items include:

- No monthly reconciliation under Regulation 2831.2.
- Incomplete columnar records of all trust funds (Reg. 2831) or separate records for each beneficiary (Reg. 2831.1).
- Trust fund shortages: the bank balance is below the broker's total liability to the owners of the funds (Reg. 2832.1).
- Commingling: trust funds deposited to the general business account, or more than $200 of broker funds kept in the trust account.
- Funds not placed in trust within three business days of receipt (Reg. 2832).

## Property management and security deposit accounts

Oregon's Real Estate Agency requires each clients' trust account and each security deposit account to be reconciled monthly, reviewed and approved by the property manager or principal broker. For a clients' trust account the ledger side is the sum of all positive owners' ledgers; for a security deposit account it is the sum of the individual deposits and fees held.

In Texas, TREC says security deposits held for an owner should go in a trust or escrow account, and may be kept in an account separate from other trust money.

## Doing it from your accounting books

If the brokerage's trust books are in QuickBooks Online or Xero, the three figures are already there; the work is pulling them together every month and keeping a signed record. Trust Reconciler does that read-only and produces a monthly pack with the three totals, outstanding items and a signature page. It was built for law firms, so when you request service, tell us your state commission's rule and we will confirm whether the pack fits it.

## FAQ

### Do I send my monthly reconciliation to the real estate commission?

Usually not. Florida Realtors notes there is no requirement to send the statement to FREC, but brokers should be able to produce it if the office is audited. Check your own commission's rule.

### Can an accountant prepare the reconciliation?

Yes, but the broker stays responsible. In Florida an accountant can prepare the statement, and the broker must review, sign and date it; Oregon requires the principal broker to verify, sign and date the reconciliation.

### Do agents reconcile their own trust accounts?

Generally the account belongs to the broker. Texas, for example, prohibits sales agents from having escrow accounts.

### What is a trust fund shortage?

California's DRE describes it as a bank balance lower than the broker's total trust fund liability to all owners of the funds. A monthly reconciliation is how a broker catches one.

### Is this legal advice?

No. This is a summary of published rules, not legal or accounting advice. Confirm your obligations with your state real estate commission or your own counsel.

### How do realtors reconcile commission checks with broker statements?

Each month, match every closing to the brokerage's commission statement (gross, split, fees, net), then match each net amount to a deposit in your bank account. Split combined payments back to their statements and chase any gap in the same month. It is ordinary bookkeeping, separate from the broker's trust account reconciliation.

## Sources

- California Department of Real Estate: Ten most common violations found in DRE audits (Regs. 2831, 2831.1, 2831.2, 2832, 2832.1, commingling). https://www.dre.ca.gov/files/pdf/commonviolationsfoundinaudits.pdf
- North Carolina Real Estate Commission bulletin (February 2017): reconcile trust accounts monthly. https://bulletins.ncrec.gov/rec%C2%B7on%C2%B7cile-to-make-peace-adjust-reconcile-trust-accounts-monthly/
- Oregon Secretary of State: OAR 863-015-0275, clients' trust account reconciliation and records. https://secure.sos.state.or.us/oard/view.action?ruleNumber=863-015-0275
- Oregon Real Estate Agency: maintaining a clients' trust account (property management, OAR 863-025-0025 to 0028). https://www.oregon.gov/rea/brokerage/cta/Pages/maintain-cta.aspx
- Florida Administrative Code Rule 61J2-14.012, Broker's records (Cornell LII copy). https://www.law.cornell.edu/regulations/florida/Fla-Admin-Code-Ann-R-61J2-14-012
- Florida Realtors: Florida escrow laws and rules (updated 1 December 2023). https://floridarealtors.org/law-ethics/library/florida-escrow-laws-rules
- Texas Real Estate Commission: FAQs on trust and escrow accounts (Rule 535.146). https://www.trec.texas.gov/node/383
- Utah Admin. Code R162-2f-403a, trust accounts, real estate company (Cornell LII copy). https://www.law.cornell.edu/regulations/utah/Utah-Admin-Code-R162-2f-403a
- IRS: Instructions for Forms 1099-MISC and 1099-NEC (Rev. December 2026), $2,000 threshold for payments made after 2025. https://www.irs.gov/instructions/i1099mec

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