6.1 General #
Your files are a record of every event relative to your dealings with your client on a listing or sale transaction. You must retain and upload to Skyslope copies of all listings, deposit receipts, canceled checks, trust records, and other documents executed by you, or obtained by you, in connection with a real estate transaction, whether the sale is consummated or not. You must maintain a neat and orderly file on every listing, sale, or lease on which you work. All files will be held in storage for a minimum of three to six (3-6) years depending on each State’s laws, from the date of closing or the date of listing if the transaction is not completed in accordance with real estate law. After this time they may be destroyed or deleted from your hard drive in accordance with the Company’s document storage policy. Storage can consist of a physical copy or a digital copy.See Exhibit G for a list of State time frames to maintain files. You are responsible to maintain records according to your state’s requirements. review Exhibit G so you know how long to keep your files in each State you are licensed to conduct business.
In addition, you are responsible for alerting the Company of any mortgage loan disclosure statement in your files; all such statements will be held in storage a minimum of three to six (3-6) years from the date of closing or the date of listing if the transaction is not completed in accordance with real estate law. After this time they may be destroyed in accordance with the Company’s document storage policy.
6.2 Designated Broker, Manager or Designee Review #
You must promptly upload into Skyslope all signed documents to the Designated Broker, Manager or his/her designee (the “Reviewer”) after receipt by you. Your Manager or the Reviewer will review the document for completeness and accuracy within 5 business days. Any incomplete or incorrect items or documents must be promptly corrected and returned to the Reviewer or your Manager.
Prior to the close of every escrow, you are required to turn in your files for review by your Manager or the Reviewer for a pre-closing review. Any missing or incomplete items will be noted and you will be given a time period within which to comply. Remember, your file must be complete to receive compensation.
File Requirements Including Communication and Activity Log
- Your file must contain an accurate, comprehensive communication log and journal of your activities relative to that file.
- Always record the following:
- The name of any person you spoke with.
- The date and time of the conversation or activity.
- The subject matter of the conversation or activity and the result of the conversation or activity.
- Any significant decision or discussion not documented elsewhere in writing.
- Also include in your file:
- A checklist and calendar of important information and deadlines.
- Copies of all correspondence, text messages, and emails to and from your client.
- Copies of all offers and counter-offers and contract addenda.
- Copies of all disclosures and reports or any other writing delivered to you or your client.
- Be sure that all documents contain signatures of all parties required to sign. Whenever your client receives a written document regarding the transaction, you must leave a copy with the client and retain a copy of the same document for your file.
- A sample communication and activity log has been uploaded to the Google drive for your use as a guide for proper record keeping. If you are not sure how to maintain a proper file, get help from your Manager.
6.3 Get It in Writing #
As a general rule, all agreements must be in writing. In fact, if you DO NOT have a written agreement with the principal, you may not receive your commission. If you discuss anything with any party or another broker/agent, always confirm your discussions and understanding with a written follow-up to that party or broker/agent. Never sign anything on behalf of your client, another agent, or anyone else.
6.4 Online Document Storage (Google Drive) & Custom @AARE.ORG Email Address #
Every Associate has the opportunity to have a Company email address for an annual fee of $72, subject to change by Google at any time. It is prorated when assigned at $6 per month then billed annually in December Agents are allowed to use their online hard drive through Google for personal storage if desired. Company documents are also stored online through Skyslope in the “Library” for access.
6.5 Paperwork Procedures Nationwide & State Specific #
Below are the methods and procedures to conduct real estate transactions in regards to paperwork in real estate transactions. You need to read through this section in its entirety. as well as the State specific section in Exhibit H for any State(s) in which you will be conducting business. Each State requires specific forms that must be completed in order to protect the customers, clients, agents / loan officers and brokers. A detailed list of those forms can be found in Skyslope on the checklists for your state and transaction type. (and unique procedures) per State is included in Exhibit H. The information in the sections below is general to all transactions nationwide. If there are specific modifications to the methods or procedures in a particular State, it is notated on Exhibit H.
6.6 Paperwork Procedures for Residential and Commercial Purchase Transactions #
Associates must provide and perform the following actions to complete a purchase file:
- Once any agency relationship is established, casual or formal, a communication and activity log needs to be completed and any PDF’s of any showings you conduct with that buyer need to be saved with the log. Any other relevant information pertaining to the buyers needs to be saved with that file. A log of activity can be kept using Skyslope by adding your client in your contacts and making “comment” under their name. Once your client goes to escrow, you may upload all the documents pertaining to the client into the file under the Documents Section.
- Within 24 hours of writing any purchase contract, the Agent will email a copy (including all signed documents) to Skyslope. Each state has a unique email address. For example California is ca-aare@skyslope.com . If the offer is accepted, the file must immediately be uploaded into Skyslope.
Handling Offers Recap:
If the offer is NOT accepted: Initial the proper boxes on the purchase agreements and email the Reviewer.
If the offer IS accepted: The Agent notifies his/her TCT.C. and the Reviewer of the acceptance. The TCT.C. will then set up a file in Skyslope and send out a completed contact sheet and a timeline to all third parties.
General types of documents required for a preliminary purchase package so the TCT.C. can start to build a complete file include: * See Exhibit H for the specific documents needed for each State.
- Agency Disclosures
- Statewide and Other Disclosures
- Purchase and Sale Agreement
- Buyer’s Inspection Reports
- Any Other Reports or Disclosures
- Seller’s Disclosures (if received)
- Counter Offers/Addendums/Trust Advisory/REO Advisory/Short Sale Addendum – if applicable to contract
- MLS Printout (signed by your client) & Tax Record
- Pre-approval Letter & Proof of Funds
The Agent/Loan officer will be responsible for scheduling inspections and must confirm with the TCT.C. and cooperating agent the date and time of any inspections. The TCT.C. will provide an inspection document to fill out for the Agent to complete during the inspection, if requested and mandated by that State. The TCT.C. will additionally create any additional forms needed for file through the Agent’s transaction software (i.e. Zip Forms, Transaction Desk, Lone Wolf or similar type of software) if requested.
Agents/Loan Officers must fill in and complete all the broker #’s, license #’s, office addresses, phone numbers, fax numbers, and email addresses on all documents. All documents must be fully executed and the confirmation of receipts must be properly filled out.
The Company highly recommends that a home warranty be purchased on ALL transactions. Even if the seller or bank refuses to pay, the Company highly recommends that the buyer obtain one or the Agent should consider offering to pay for the home warranty from the Agent’s commission. The Company recommends that the Agent requests the maximum coverage. If a client refuses to purchase a home warranty protection plan, a waiver must be signed by the client.
Always verify the correct amount of coverage is obtained for the home warranty order and you may add a specific brand of warranty to help reduce the Company’s E&O insurance deductible, in the event of a claim. Check with the E&O company to see if this is an option.
Always request that a “claims loss history report” is provided as well as the natural hazard disclosure report.
The TC. is responsible to send the Reviewer and the Agent a “file review” email a week prior to the close of escrow alerting them for any assistance necessary to obtain paperwork or disclosures to complete the file. Once the file is complete, the TCT.C. will request a final review from the Auditor. The Auditor will conduct a final review, approve the document in Skyslope, and change the status from “Pending” to “Closed”. Some TC’s will then mail a compact disc (CD) or flash drive of the completed file to the client if that is part of the agreed upon service.
A complete checklist of all the documents required to be signed in order to complete a purchase file can be found on the checklists in Skyslope. Agents/Loan Officers will not be paid until the file is complete and reviewed.
6.7 Paperwork Procedure for Residential and Commercial Listing Transactions #
Associates must provide and perform the following actions to complete a listing file:
- Upon scheduling a listing appointment, email your TC the following so they can prepare you’re listing packet:
- Tax record
- Listing period & price (if known prior to appt.)
- Seller(s) name, address, email, and phone
- TC fee – if being paid by seller or agent or split
- TC will then prepare a complete paperwork and disclosure packet and email it to the Agent before the appointment.
- Agent must prepare and complete the following tasks on their own to present to the seller(s) at the appointment:
- CMA (Competitive Market Analysis) showing ALL comps.
- Seller’s estimated net sheet (this can be obtained from an escrow company of your choice or done in most MLS programs)
- Create a new contact in Skyslope and log your communication and activity in the Comments section under that contact. Forward the CMA and Net Sheet to your TC for upload into Skyslope .
- Complete an Agent visual inspection during the listing appointment, and fill out any agent inspection documents if required by that State.
- If you will not put the home directly in the MLS within 24-48 hours, someMLS and local Boards require that the Agent must complete an MLS exclusion form and fax/email it to their MLS within 24 hours of execution. The form must be signed by your broker as well as your client. Send this form to your broker for electronic signature immediately after your listing appointment.
- Within 24 hours of completion of any listing paperwork, the Agent or TC will create the Listing in Skyslope Any signed documents need to be uploaded to the transaction for review from your T.C. and Reviewer. The Agent must notify the T.C. and Reviewer that the transaction has been created. The Reviewer will then review the files and the T.C. will start to build the file.
- General types of documents required for a preliminary listing package so the TC can start to build a complete file
include: * documents will vary by stateSee Exhibit H for the specific documents needed for each State.
- Agency Disclosures
- Statewide and Other Disclosures
- Listing Agreement
- Seller’s Advisory
- Seller’s Listing Information
- Well or Septic Disclosures (if applicable)
- Mineral or subsurface rights (if applicable)
- Electronic Signature Verification/Authorizations
- Real Estate Transfer Disclosures
- Seller Disclosures or Property Questionnaire
- Agent’s Visual Inspection
- FIRPTA (Foreign Investment Real Property Tax Act)
- Environmental Booklet Hazards Receipt
- Local Area Disclosures or Booklet Receipts
- Water Heater Bracing, Smoke or Carbon Monoxide Detector Disclosures
- Water Conservation Certificate or Disclosures (if applicable)
- Lead Based Paint Disclosures– year built 1978 or prior
- Natural Disaster Hazards Reports
- Advisory Disclosures
- Statewide Disclosures
- Keysafe/Lockbox (if applicable)
- CMA
- Seller’s Net Sheet
- MLS Printout
- Tax Record
- Trust, REO, Probate, or Short Sale Advisory (if applicable)
Any modification of terms (MT) is required to be in writing for any listing change. Each State has a unique form for this document. Any MT signed must be turned in within 24 hours for review and must be completed and signed prior to making the change in the MLS. The form must be uploaded into Skyslope within 24 hours of being signed.
If a listing is canceled, you will change the status from Listing to Canceled in Skyslope within 24 hours and notify your TC and Reviewer of the cancellation. Any canceled listing must have the Cancellation of Listing signed by client and Broker and must be uploaded into Skyslope prior to canceling the file.
Agents must fill in and complete all the broker #’s, license #’s, office addresses, phone numbers, fax numbers, and email addresses on all documents. All documents must be fully executed and the confirmation of receipts must be properly filled out.
The Company highly recommends that a home warranty be purchased on ALL transactions. Even if the seller or bank refuses to pay, the Company highly recommends that the buyer obtain one or the Agent/Loan Officer should consider offering to pay for the home warranty from the Agent’s commission. The Company recommends that the Agent requests the maximum coverage. If a client refuses to purchase a home warranty protection plan, a waiver must be signed by the client.
Always verify the correct amount of coverage is obtained for the home warranty order and you may add a specific brand of warranty to help reduce the Company’s E&O insurance deductible, in the event of a claim. Check with the E&O company to see if this is an option.
A complete checklist of all the documents required to be signed in order to complete a listing file can be found in the Escrows folders under the AARE main folder on Google drive. A copy of the transaction checklist may also be found in the “Library” section of Brokermint. Agents will not be paid until the file is complete and reviewed.
6.8 Paperwork Procedure for Residential and Commercial Lease/Property Management Transactions #
Associates must provide and perform the following actions to complete a lease file:
- Once any agency relationship is established, casual or formal, a communication and activity log needs to be completed and any PDF’s of any showings you conduct with that buyer need to be saved with the log. Any other relevant information pertaining to the landlord/tenant needs to be saved with that file. A log of activity can be kept using Skyslope by going to the Log section and entering a note.Brokermintin by adding your client in your contacts and making “comment” under their name. Once your client goes to escrow, you may upload all the documents pertaining to the client into the file under the Documents Section.
- Within 24 hours of writing any lease, the Agent will create a new transaction in Skyslope. Upload any signed documents to the transaction for the Reviewer to review. ALL applications (accepted or not) must be uploaded to the transaction (in Skyslope and Appfolio). If the application is accepted and a lease is executed, upload all executed documents to Skyslope and Appfolio and submit the file for review.
Application Recap:
If the application is NOT accepted: Document why the application was rejected and then upload the file into Skyslope. This is done in Appfolio where the tenant is denied due to a credit report, etc.
If the application IS accepted: The Agent drafts up a lease, executes the lease and all documents below, then uploads all executed documents to the transaction in SkyslopeSkysplopeand, Appfolio thenand submits the file for review.
- General types of documents required for a preliminary lease or property management package so you can start to build a complete file include: *Items will vary by state See Exhibit H for the specific documents needed for each State.
- Property Comps
- Agency Disclosures
- Lease Listing Agreement– if applicable
- Property Management Agreement– if applicable
- MLS Printout
- Keysafe Lockbox Addendum– if applicable
- Authorization to Receive and Convey
- Electronic Signature Verification/Authorization
- W-9 (for co-op agent/broker or property owner)
- Copy of Deposit Check & First Months Rent
- Lease Agreement
- Application to Rent
- Environmental Booklet Hazards Receipt
- Local Area Disclosures or Booklet Receipts
- Water Heater Bracing, Smoke or Carbon Monoxide Detector Disclosures
- Water Conservation Certificate or Disclosures (if applicable)
- Lead Based Paint Disclosures– year built 1978 or prior
- Natural Disaster Hazards Reports
- Advisory Disclosures
- Statewide Disclosures
- Tenant Flood Disclosures
- Megan’s Law Database Disclosure
- Move-in/Move-out
- Any other Tenant/Landlord Disclosures
- Credit Report (tri-merged preferably)
- Agents shall provide the following information in Appfolio – Emergency After Hour Maintenance Request: Each property manager is the first point of contact for the tenant. Property Managers should educate their tenant on what qualifies as an emergency and provide their personal contact number. The property manager is responsible for scheduling and coordinating the repair. All other maintenance requests should be submitted via the Appfolio portal.
Agents/Loan Officers will not be paid until the file is complete and reviewed. The Reviewer will notify the Broker or Manager when all documents have been submitted for review and approved.
The Agent/Loan Officer is responsible for sending copies of all signed documents to the landlord, tenant, and property manager (if any).
6.9 Do Not Use Outdated Forms #
Always use current forms. Keep your on-line forms database (such as Zip Forms, Transaction Desk, Lone Wolf or similar type of software) up to date with the most current forms. Always check with your Manager or other Company Associates to ensure that you are not using out-of-date forms. Meetings will be held from time to time to review any changes and/or updates that have been published.
6.10 Document Destruction & Shredding – Pricing & Locations #
It is Company policy for Associates and employees to shred documents with confidential client’s information after scanning the hardcopy into a digital file for record keeping. Associates must either:
- Purchase a shredder at their home office to use.
- Use office shredders at locations that have an office shredder.
- Drop off sensitive documents to be shredded at places such as Goodwill.
Goodwill charges $6.00 per box (10″ H x 12″ W x 15″ D) for documents brought to our secure drop-off locations. For more information, document destruction hours, for pricing on large loads, purge services, or ongoing business services please contact Goodwill at 1-800-926-3488. Certain community banks, libraries, etc. also offer free shredding from time to time.
6.11 The Listing/Management Commission Agreement #
State real estate laws require that a compensation agreement be in writing and signed by the party to be charged in order to be enforceable. If you represent a buyer in a for-sale-by-owner (FSBO) transaction and the buyer is to pay a commission, you must have a written agreement with the buyer to pay that commission, such as a buyer-broker agreement.
If the seller has not signed or will not sign a listing agreement and if the seller is to pay the commission, you must have a written agreement with the seller such as a single party compensation agreement.
Unless approved in advance by your Manager, all residential, commercial, property management and lease listings will be “Exclusive Authorization Right to Sell” listings. All listing and management agreements will be taken on the most current STATE ASSOCIATION OF REALTORS® Standard Forms, AIR CRE forms (commercial only) or another form approved by the Broker such as custom drafted Letters of Intent (LOI).
6.12 Regulators, Government Officials – Inquires/Visits/Subpoenas #
Any inquiry by a government official, whether by telephone, letter, or in person, should immediately be forwarded to the Broker or Manager. In the absence of the Broker or Manager, the name of the official and agency or department he/she represents should be obtained. Then, the owner or other officer of the Company should be contacted. If none of these persons are available, the person receiving the inquiry should immediately contact the Company Compliance Director who will then contact the company attorney. In situations where neither the Broker or Manager nor an officer of the Company are available and the inquiry is of an in-person nature, the person receiving the inquiry should not allow any representative from a local, state or federal office to see any files or any information maintained in the office unless presented with a valid search warrant signed by a federal judge or a judge of the county in which the office is located, or unless the government official is a representative of the State regulator or Real Estate Commission or State Department. The person should refuse to answer any questions of such a representative official unless the company’s attorney has authorized the person to answer.
If a process server appears in the office with a subpoena for the Company, any employee or agent / loan officer should accept it. Once accepted, it should immediately be turned over to the Broker or Manager. The Broker or Manager should immediately contact the owner or other officer of the Company. In the absence of any of these persons, the Broker or Manager should contact the Company’s attorney. If the process server asks for a specific person, only that specific person may accept the subpoena. If that person is not in the office, the person receiving the inquiry should not volunteer any information about the person requested and should not give out home phone numbers or home addresses, even if asked. Refer the inquiry to the Broker or Manager immediately.
6.13 State Real Estate Regulator, Commission or Department Audits #
Company policy is to cooperate fully with any audit from any State regulator or real estate commission and provide records in a timely fashion.
Below are the methods and procedures typically that take place in the event of an audit. You need to read through this section in its entirety. as well as the State specific section in Exhibit I for any State(s) in which you will be conducting business. Each State may have unique methods of auditing. The information in the sections below is general to all audits nationwide. If there are unique procedures in your a particular State please familiarize yourself with them., see, it is notated on Exhibit I.
Real Estate Audits
The Company must make all books, records, and accounts available for examination during regular business hours. An audit may be triggered by a complaint initiated by a member of the public or as a result of the real estate regulatory agency’s ongoing audit program. The result of the audit is typically one of four outcomes:
- No Action Necessary. Most audits conducted result in no action necessary. Suggestions may be made by the regulator as to how to better maintain records and documents, but nothing serious enough regarding compliance with the law warrants further action.
- Citation – Warning Letter. A citation – warning letter may be given to a broker or licensee for minor or “technical” violations, such as clerical errors or a slight unintentional error in a record form. The purpose of the letter is to formally prompt more meticulous efforts in the future and to prevent letting small errors, if continued to go unchecked, rise to the level of more serious law or regulation violation.
- Informal Conference. Certain audits may result in an informal conference. The conference follows the audit and involves the broker sitting down with the auditor to review corrections that should take place in the licensee’s brokerage to avoid minor errors in record keeping and in procedural matters.
- Accusation – Administrative Hearing Procedures – Penalties. Violations that are more serious will result in an accusation being filed by the regulator against the broker or licensee. An accusation is the first step in the administrative disciplinary procedure adopted by licensing agencies. An accusation is a written statement of charges, setting forth the acts that constitute violation of the law. The accusation must be served upon the licensee by registered mail or by other means provided for under the administrative rules. No adverse action may be taken against a licensee without proper service.
No action may be taken if compliance with the cited regulation would have resulted in the violation of another regulation.
If a licensee files a Notice of Defense within a specified time period (varies by State) after service of the accusation, the licensee is entitled to a hearing on the matter. Typically, within a specified time period such as 30 days (varies by State) after being served with the accusation, the licensee is entitled to request and obtain names and address of all witnesses and is entitled to inspect and make copies of any of the following:
- Statement of complaining parties.
- Statements of parties to the proceeding or witnesses.
- Writings which are relevant and admissible as evidence.
- Investigative reports.
If the above information cannot be obtained voluntarily, the licensee may subpoena the information. It should be noted that the administrative hearing rules of evidence are much less formal than traditional court rules and procedures. A hearing before an Administrative Law Judge will usually occur in the county in which the transaction giving rise to the alleged violation of law occurred. Within a specified time period such as 30 days (varies by State) after the case has been submitted to the Administrative Law Judge, a proposed decision will be released to the regulator. The regulator must serve a copy of the proposed decision on the licensee within a specified time period such as 30 days (varies by State) after being received by the regulator. The proposed decision comes within a specified time period such as 30 days (varies by State) after delivered or mailed to the licensee. In serious cases, the regulator has the authority to make the effective date of the proposed decision earlier.
Depending on the nature and severity of the violation, the proposed decision and final order will usually involve one of the following:
- License suspension for a stated period.
- A fine imposed instead of suspension.
- License revocation and issuance of a “restricted” license for the remaining term of the original license. The terms of the restricted license will be that which the regulator deems necessary, taking into consideration the violations of the particular case that gave rise to the accusation.
- Revocation.
If the licensee disagrees with the proposed decision, the licensee has the option of filing a petition for reconsideration, which takes the case back through the administrative hearing process. The licensee also has the option of filing a petition for judicial review that will move the case to the state’s court system. In this event, Company Associates will be required to obtain and pay for their own legal counsel if they wish to appeal the decision and file a petition for reconsideration.
Within a specified time period such as one-five years (varies by State) after the effective date of the decision, the licensee may apply to the regulator for reinstatement or reduction in penalty. Any decision regarding reinstatement or reduction of penalty is up to the regulator. The regulator may, as a condition of reinstatement, require the applicant (licensee) to fulfill certain education requirements such as retaking the broker’s or salesperson’s examination, or completing continuing education requirements, and passing the professional responsibility examination.
The regulator’s disciplinary authority is based upon violations of the State Real Estate Law and the Department or Commissioner’s Regulations. These violations statutorily have their basis in each States licensing and administrative laws, business and professions code, statute or chapters. The real estate regulators have no authority to bring criminal charges. They do have the authority to make a referral of a potential criminal matter to the appropriate district attorney.