Transcript Brokerage Office Policy - The Massachusetts Association of

BROKER OWNERS
OVERVIEW
Paula K. Savard, ABR,CRB,CRS,GRI,E-PRO
[email protected]
Objectives of
webinar
• To review areas of Policy that should be address by
real estate firms
• Some are advised
• Some are legislated such as Agency and Written
Information Security Policy.
• Prime value of a manual is for the consistency of
providing services to clients and customers of the firm.
Table of Contents Office Policy
Manual
•
• Advertising
•
• Agency Policy with Clients
•
• Associate Agreement As Part of the Policy
•
• Business Cards
•
• Buyer Agency
•
Table of Contents
Office Policy Manual
• Buyer client file contents
• Caravan
• Checklists
• Closings
• Code of Ethics
Table of Contents
Office Policy Manual
• Commission Schedule
•
Cooperative Sales with Outside Offices
•
Company.. Legal Entity.. DBA
•
Deposits
•
Designated Agency
•
Director of Marketing
•
Dual agency with Informed Consent
Table of Contents
Office Policy Manual
•
Education Policy for Tuition Reimbursement
•
•
Escrow Policy from Deposit to Closing
•
•
Facilitator
•
•
History of the Company
•
•
•
Lender Policy
Table of Contents
Office Policy Manual
• Listing Policy and Procedure
• Marketing and the Marketing Manager
• Menu of Services
• Offers to Purchase
• Office Conference Center
• Open House Central
•
Table of Contents
Office Policy Manual
• Previous Client Discount
• Realtors
• Realty Guild
• Records
• Referral Policy
• Seller Agency
• Showing Policy
Table of Contents
Office Policy Manual
•
• Structure of a Real estate transaction
•
• Teams
•
• Training and Thursday Meetings
•
• Voice Mail
•
End of table of
contents
• Real estate is a practice. Habit forming good systems is
needed to
• Succeed and achieve in the real estate industry.
• We offer systems. The individual associate must form
consistent habits For their own success and ours
• This is a recipe book. Like all recipes, the ingredients can be
modified somewhat, with good judgment, without altering
the original intended result.
• Property of Paula K Aberman Associates, Inc
AGENCY POLICY
• THIS WAS PART OF THE 2005 LEGISLATION
REGARDING RELATIONSHIPS WITH
CONSUMERS IN MASSACHUSETTS;
• RELATIONSHIP DISCLOSURE AND OFFICE
POLICY OPTIONS
• BROKER OWNERS WERE REQUIRED TO
SELECT AN AGENCY POLICY FOR THEIR
LICENSEES TO PROVIDE AND DISCLOSE AT
THE FIRST PERSOAL MEETING WITH A
CONSUMER.
TOPICS FOR AGENTS
GUIDANCE
• ADVERTISING.. THIS SHOULD ADDRESS
YOUR FIMS MARKETING PROGRAM FOR THE
AGENTS TO BE ABLE TO PRESENT TO
PROSPECTIVE SELLER CLIENTS DURING
LISTING PRESENTATION.
• HOW DO YOU MARKET YOUR FIRM’S
LISTINGS?
• WHO PAYS FOR WHAT?
PICK YOUR POLICY..UPDATE
YOUR OP MANUAL
• 2005 Disclosure… Seller agency, Buyer
Agency, Dual Agency with informed consent,
Designated Agency, Facilitator.
• Does everyone in the firm have a fiduciary
duty to advocate for each and every client of
the firm? OR
• Does the individual agent and their supervising
broker have the fiduciary duty to advocate for
their designated client?
Dual Agency in
Massachusetts
• An individual agrees to
represent both the buyer and
the seller in the same
transaction.
• Buyer and Seller must each
have knowledge of dual
representation and consent
to it in writing.
• The individual agent is a
dual agent
• The firm with whom the
individual agent is
associated is a dual agent.
Office Policies/ Legal Issues for
Designated Agency
• appointments by a
broker or salesperson of
an agent of the firm to
represent a seller or a
buyer shall not limit the
liability of that
appointing broker or
salesperson for any
breach of duty by the
designated agent.
• appointments of
Designated agents to
represent the seller or
the buyer shall extend
only to those
Designated agents
appointed by the
designated broker or
salesperson AND
CONSENTED TO BY
THE SELLER OR
BUYER.
Handling Financial
Disputes
• Mediation
• Arbitration
• Procuring Cause
• In House Disputes Agent to Broker
Agent to Agent
OFFICE POLICY
OPTIONS
• Single Agency.. Only buyers
•
only sellers
• Dual Agency with informed consent Every Agent
in my firm represents every client of my firm
• Designated Agency the agent is the only for the
client/all other agents can represent the other side
of the transaction
• Facilitation
Associate agreement
• Start date
• End Date… renew annually or self renew
• Should agree to REALTOR membership, MLS
membership and payment of those fees,
• Should agree to adhere to Office Policy Manual a copy
of which remains the property of the firm.
• Should reiterate the IRS language maintaining the
independent contractor relationship
Associate agreement
• Should address commission splits for Listing, Selling in
both in house and cooperative transactions
• Should address policy for commission rebates, legal
fees involving transaction within which the associate
participated and deductibles for Error and Ommission
in the event a legal issue is handled by E&O
• Should agree on exit strategy if associate breach prior
to expiration
Client Issues
• Escrow Accounts
• Signatories on Contracts
• Deposits, requirements, timely tracking.
Closing Finances
• Payments to Cooperating Firms
• Payments to Agents within the firm
• 1099’s
Code of ethics
• On an annual basis the Realtor Code of Ethics is
added to the policy manual, since the Associate has
agreed to adhere to and abide by in the Associate
agreement.
Record Retention
• What you must save and for how long
• Accounting suggestions
• Safe storage and strategies for online communications,
legality of such
• Mechanism for providing all parties copies of
agreements.
HANDLING FINANCIAL
DISPUTES
• MEDIATION
• A voluntary process in which disputing parties meet
with a mediator appointed by the Association to create
a mutually acceptable resolution of the dispute, rather
than having a decision imposed by an arbitration
hearing panel.
MEDIATION
• Mediation can occur before or after the Grievance
Committee reviews requests for arbitration, depending
on local Association policy.
• If a dispute is resolved in mediation, the parties sign an
agreement spelling out the terms of the settlement, and
no arbitration hearing is held.
ARBITRATION
• Arbitration: Basic Issue
• Is there an arbitrable issue, that is, a money dispute?
• Typically a dispute over which REALTOR is entitled to
the cooperative commission in a transaction.
ARBITRATION
• The Arbitration Process
• Request filed.
• Arbitration is conducted under Article 17 of the Code
of Ethics and the state arbitration statute (if any).
ARBITRATION
• Article 17 provides that arbitration occurs
under the following circumstances:
• Contractual disputes or specific noncontractual disputes
(see Standard of Practice 17-4);
• Between REALTORS (principals)
associated with different firms;
• Arising out of their relationship as
REALTORS
ROLE OF GRIEVANCE
COMMITTEE
Committee performs a screening function similar to
review of ethics complaints.
Key question for the Grievance Committee:
If the allegations in the request for arbitration
were taken as true on their face, is the matter at
issue related to a real estate transaction and is it
properly arbitrable, i.e. is there some basis on
which an award could be based?
PROFESSIAL STANDARDS
HEARING PANEL
• Function is to conduct a full “due process” hearing
with sworn testimony, witnesses and evidence.
• Hearing Panel is comprised of members of the
Professional Standards Committee.
PROFESSIONAL
STANDARDS HEARING
After the hearing, the Hearing
Panel decides which
REALTOR is entitled to the
award (typically a disputed
commission in a transaction),
proven by a preponderance of
the evidence.
PAYMENT OF THE
AWARD
• Generally, the award of the Panel in an arbitration case
can be judicially enforced if not paid by the nonprevailing party.
• Some associations have procedures requiring that
awards by deposited with the association pending
review of the hearing process or during legal challenge.
IN HOUSE DISPUTES
• Broker to agent
• Associate Agreement signed by the Broker and agent,
start and stop dates, automatically renewable unless
notice is given, when agent is to be paid, what
percentage of each transaction, independent contractor
verbiage, referral fees
IN HOUSE DISPUTES
• Agent to Agent
• Unless written agreement, between agents within a
firm, Broker agent agreement prevails.
• Memo to Broker from referring agent prior to closing,
signed by receiving agent.
ESCROW ACCOUNT
•
(10) Client Funds:
•
(a) Escrow Accounts. Unless otherwise agreed to in writing by the parties
in transactions involving the sale, purchase, renting or exchange of real
property, all money of whatever kind and nature paid over to a real estate
broker to be held during the pendency of a transaction shall be
IMMEDIATELY deposited in a bank escrow account and such broker
shall be responsible for such money until the transaction is either
consummated or terminated, at which time a proper account and
distribution of such money shall be made..
•
An escrow account is an account where the broker deposits and maintains
the money of other parties in a real estate transaction and such broker has
no claim to such money. An escrow account may be interest or noninterest bearing but where it is interest bearing the broker must make a
proper account of such interest at either the consummation or termination
of the transaction
ESCROW ACCOUNT
• b) Record Keeping. Every broker shall keep a record of funds
deposited in his/her escrow accounts, which records shall clearly
indicate the date and from whom the broker received the money,
date deposited along with the source of the money and check
number, date of withdrawal with the name of the person receiving
such withdrawal, and other pertinent information concerning the
transaction and shall clearly show for whose account the money is
deposited and to whom the money belongs. Every broker shall
also keep a copy of each check deposited into and withdrawn
from the escrow account for a period of THREE(3) YEARS
from the date of issuance. All such funds and records shall be
subject to inspection by the Board or its agents
ESCROW ACCOUNT
• (c) Salespersons Prohibited from Holding Funds. A real
estate salesperson or broker engaged by another broker
shall immediately turn over all deposit money or other
money received to such employing broker. No
salesperson shall at any time hold client funds.
Signatories on
contracts
• Bi Lateral Agreements
• Listing agreement… who signs ?
and owner of property
agent for firm
• Buyer Agency agreements .. Who signs ? agent for
firm and buyer client
• Offer to Purchase/Purchase and Sales who signs?
Buyer and Seller
1099 TAX FORMS
• Shall be issued by the Broker to agents whose
licenses are assigned to Firm or individual
Broker’s license no later than January 31, of
the following year.
• No need to send 1099 for Fees paid to other
firms which are incorporated.
• Individual Broker’s licensees paid in
cooperative transaction should be sent 1099
Internet
• Standard of Practice 12-5
Realtors® shall not advertise nor permit any person
employed by or affiliated with them to advertise
listed property in any medium (e.g., electronically,
print, radio, television, etc.) without disclosing the
name of that Realtor®’s firm in a reasonable and
readily apparent manner. (Adopted 11/86, Amended
1/07)
INTERNET
• Standard of Practice 12-8
The obligation to present a true picture in
representations to the
public includes information presented, provided,
or displayed on Realtors®’ web sites. Realtors®
shall use reasonable efforts to ensure that
information on their web sites is current. When it
becomes apparent that information on a
Realtor®’s web site is no longer current or
accurate, Realtors® shall promptly take
corrective action. (Adopted 1/07)
INTERNET
• Standard of Practice 12-9
Realtor® firm web sites shall disclose the firm’s
name and state(s) of licensure in a reasonable
and readily apparent manner.
Web sites of Realtors® and non-member
licensees affiliated with a Realtor® firm shall
disclose the firm’s name and that Realtor®’s or
non-member licensee’s state(s) of licensure in a
reasonable and readily apparent manner.
(Adopted 1/07)
Standard of Practice 1210
• Realtors®’ obligation to present a true
picture
in
their
advertising
and
representations to the public includes the
URLs and domain names they use, and
prohibits Realtors® from:
• 1) engaging in deceptive or unauthorized framing of
real estate brokerage web sites;
Standard of Practice 1210
• 2) manipulating (e.g., presenting content developed
by others) listing content in any way that produces a
deceptive or misleading result; or
3) deceptively using metatags, keywords or other
devices/ methods to direct, drive, or divert Internet
traffic, or to otherwise mislead consumers. (Adopted
1/07)
Standard of Practice 1211
• Realtors® intending to share or sell consumer
information gathered via the Internet shall disclose
that possibility in a reasonable and readily apparent
manner. (Adopted 1/07)
RECORD KEEPING
• Consent forms
• Must be signed by the buyer and the seller and must be
kept for a minimum of 3 years
• All agent of the firm should be checking the same box
in the disclosure form .
• CONFLICT OF INTEREST if agents from
the same firm disclose single agency and
designated agency
Understanding Fees
• Associates Agreement within the firm
• Agent participation online
• Accepting and offering referral fees online
• Internet based consumer mining in other license
jurisdictions
WISP
Formulating A
Comprehensive
Written
Information
Security Program
WISP
• COMMONWEALTH OF MASSACHUSETTS
OFFICE OF CONSUMER AFFAIRS AND
BUSINESS REGULATION 10 Park Plaza – Suite
5170, Boston MA 02116 (617) 973-8700 FAX (617)
973-8799 www.mass.gov/consumer
wisp
•
“personal information” means a Massachusetts resident's first
name and last name or first initial and last name in combination
with any one or more of the following data elements that relate to
such resident: (a) Social Security number; (b) driver's license
number or state-issued identification card number; or (c)
• financial account number, or credit or debit card number, with or
without any required security code, access code, personal
identification number or password, that would permit access to a
resident’s financial account; provided, however, that “personal
information” shall not include information that is lawfully
obtained from publicly available information, or from federal,
state or local government records lawfully made available to the
general public.
wisp
• II. PURPOSE:
• The purpose of the WISP is to: (a) Ensure the security
and confidentiality of personal information; (b) Protect
against any anticipated threats or hazards to the
security or integrity of such information (c) Protect
against unauthorized access to or use of such
information in a manner that creates a substantial risk
of identity theft or fraud.
wisp
• (1) identify reasonably foreseeable internal and external
risks to the security, confidentiality, and/or integrity of any
electronic, paper or other records containing personal
information; (2) assess the likelihood and potential damage
of these threats, taking into consideration the sensitivity of
the personal information; (3) evaluate the sufficiency of
existing policies, procedures, customer information systems,
and other safeguards in place to control risks; (4) design and
implement a WISP that puts safeguards in place to
minimize those risks, consistent with the requirements of
201 CMR 17.00; and (5) regularly monitor the effectiveness
of those safeguards:
wisp
• Where do you have Written Information that you need
to secure?
• Hard copy files, computer files…?
• Write a policy for it’s protection to be included in your
company Office policy Manual.
• Have all agents sign the policy and agree to it’s
compliance.