Broker Responsibility in a Nutshell (RE03C08)
Thinking about becoming a Broker Owner/Manager of a real estate company? Wait..go through this course first! You need to know the responsibilities. It’s not a walk in the park! Already a Broker/Manager…come enjoy a real honest conversation about everything that you go through on a daily basis. If you were going to create a policy and procedures manual this would be the road map you would use to create it. Anything that is needed..is in this class. See course outline
The purpose of the course is to identify all of the various responsibilities of owning or managing a Real Estate Brokerage including:
- The Scope of the general duties of the broker. How are they structured regarding their agents, their business structure and the liabilities associated with the different policies.
- Duties owed to the clients/customers in the transactions including keeping them informed from beginning to end which might include a web based transaction management system
- Managing the OPM (Other people’s money) the personal property and accounting for the deliver of all documents
- Property Management or Leasing of properties is climbing the ladder of the most frequent cause for legal action and discipline at the real estate commission level
- Who’s watching over the agents: Making the decision to hand the reins over to a ‘manager’ and how to select and monitor that for liability issues
- Compliance in Advertising is a huge problem today. With the web the advertising guidelines have gone out the window. How can a broker reel them back in?
- Every state has different rules on how long the records must be maintained…and that can be done in many ways. But the big question is ‘do you have all of the records from agents emails, files, etc?
- Is your Policy and Procedures Manual tight enough to save you when there is a problem? How do you implement your policies?
- Is it OK to set performance standards, require education, attend meetings without creating an employer /employee relationship?
- What type of a business entity are you and how is that recorded?
- When the consumer or another broker files a complaint on you or you want to file on them, what does that say about the business?
- How has procuring cause changed?
- What is procuring cause and why does anyone care about it?
- How do disputes arise?
- How does the Code of Ethics affect procuring cause issues?
- How has Buyer Representation affected procuring cause issues?
- How does the Hearing Panel determine who was the procuring cause when there is a dispute?
- Are there Case Studies that can help us understand how cases are decided?
- What risk management techniques can be implemented to avoid procuring cause situations?
How has the industry changed to affect procuring cause issues?
Procuring Cause defined:
The proximate cause:
Originating a series of events Without a break in continuity Results in the accomplishment of the sale The inducing cause: Direct or proximate cause A broker will be regarded as the “procuring cause of the sale” if his efforts are the foundation on which negotiations resulting in a sale are begun.
Myths regarding Procuring Cause:
- He who shows the property is the procuring cause (threshold)
- He who has the buyer rep agreement is the procuring cause
- He who writes the offer is the procuring cause
- He who closes the transaction is the procuring cause
- Once the transaction has closed and money dispersed the deal is sealed.
Factors that determine Procuring Cause
- Who FIRST introduced the buyer to the property?
- Were negotiations continuous?
- What related services were given?
- What were the terms of the sale?
- How did the second broker get involved?
- Contracts that may exist:
- Listing contract between seller and listing broker
- Contract between listing broker and co-op brokers
- Purchase or sales contract between seller and buyer
- Buyer broker agreement between buyer and their broker
THE CODE OF ETHICS AND PROCURING CAUSE
- Factors for Consideration
- No predetermined rule of entitlement
- Arbitrability and appropriate parties
- Relevance and admissibility
- Communication and contact- abandonment and estrangement
- Conformity with state law
- Consideration of the entire course of events… “ The list”
- Guidelines for the Hearing Panel
- Arbitration awards cannot include findings of fact
- Right to testify
- Decision of the panel is binding
- Party’s right to recourse
- NAR limits $
- Risk Reduction Techniques
- Get the seller to sign an Exclusive right to sell agreement
- Keep detailed written records of showings
- Keep telephone log of all phone calls with clients and customers
- Attempt to avoid controversies
- Keep communication lines open
- Always ask if the buyer if they have already seen the property with another agent
- Explain to the buyer thoroughly when they would be responsible for a fee.
Apply the Golden Rule……….