RISK MANAGEMENT FOR BROKERS

1. RISK MANAGEMENT FOR BROKERS Instructor’s Name

2. Introduction You, the broker, are the key to managing risks in your office. If you are the qualifying broker, the burden is even greater. Your risk management obligations can be divide into two areas – Managing Money and Managing People. It is up to you to ensure that your agents service the clients and produce income while staying out of trouble. You are the key.

3. Managing Money I. Trust Funds Trust fund management Earnest money Property management fund management Contract provisions Discuss – Give examples of contract clauses that dictate different ways that earnest money might be handled

4. Trust Funds Disbursements & transfers of earnest money How? When? To Whom? Discuss – You are the broker and have acquired another company whose property management accounting entries do not adhere to License Law. How would you handle this situation?

5. Trust Funds Violations – Commingling Conversion Case Study

6. Trust Funds Disciplinary Action • Penalties • Hearings • Appeals

7. II. Auditing Procedures Types of Trust Accounts • Earnest money • Security deposits • Rental receipts Other business accounts

8. Auditing Procedures Account Reconciliation & Records Retention Discuss – You have several agents who own rental property and your company has no property management department. The agents wish to manage their own properties. Create company guidelines that will give everyone the most protection.

9. Auditing Procedures Auditing preparation Alabama Real Estate Commission [www.arec.alabama.gov]

10. Managing People III. Training & Supervision Law & company policies Discuss – With the growth of electronic and digital forms, brokers must consider how to maintain complete and accurate files. What policies and procedures should a broker have in place to practice good risk management in this area?

11. Training & Supervision Responsibilities of Qualifying Broker - The burden imposed by the law Discuss – From a risk management perspective, discuss new licensees vs. experienced agents, and then full-time agents vs. dual career licensees

12. Training & Supervision Strategies for supervising agents & staff Discuss – What steps can the broker take on a daily basis to ensure that the licensees in the company are following proper risk management practices?

13. Training & Supervision Strategies for supervising agents & staff Discuss – How should a broker manage his/her “virtual” agents who work from another location without micro-managing them?

14. Training & Supervision Law requirements • Real Estate Commission • Local, state, & federal laws • Anti-trust • Other

15. Training & Supervision Law and company policies Discuss– List the specific issues that should be included in an office policy manual

16. Training & Supervision Risk Issues- Personnel files, office files, & confidentiality Discuss– Concerning the protection of confidential information, discuss the appropriate office configuration. Where are the files kept? Who has access to them? What about the fax machine? Emails?

17. Training & Supervision Advertising Marketing Social Networking Technology Discuss – How can the broker monitor the agents’ advertisements in the active multi-media locations available today?

18. Supplemental Content Current Legal Issues Disciplinary Action Current Cases

19. Agent Selection Independent contractor vs. employee New licensees Experienced agents Non-licensed assistants

20. Termination/Transfer Termination Transfer