all right you ready for this we're gonna do this this really intensive preamp course um so it's basically the whole textbook in four hours but we're gonna do half of them two so let's get started we're gonna go through chapter one uh we're gonna hit everything in the book no PowerPoints it's literally just gonna be a cram sheet put on the board so this is how we're gonna do this so first chapter is becoming a real estate broker I'll be looking down the book a lot so I can kind of get an idea okay so first thing we talk about is the application process and what we need to have and one thing that's always tested is social security number what is the Social Security number for is to check child support right remember that the one question you'll be asked okay so that's the first thing that will come up we're going to go through the fingerprint process the criminal background check we don't really need to cover there's this this thing called the summary of applicants you remember what the summary of applicants is a summary of applicants is when you have something come up on your background that needs more information and a lot of times you have to appeal to Frank and sit in front of committee it's 90 days for your application so 30 days for a normal process to get your application approved 90 day up to 90 days Frack mates in Orlando once a quarter so this is a summary of applicants it is to check for licensing as licensing approval 90 days 90 days at that point somewhere up against a year 90 days um we have reciprocity uh Florida doesn't have reciprocity in any states but Florida has reciprocity if you're an armed service member and your spouse do you remember that okay we're going to move on from there non-resident application what's the definition of a resident a Florida resident uh four months four months continuous and or intention to live for months so if you moved here and you've only been here a day you're still a resident if you're intending to live here permanently so like if you signed a sixth or seventh month lease you're you're a resident you're a resident okay uh Mutual recognition is when another state recognizes your license or we recognize another State's license I believe there's like seven right now uh you have to take a what uh oh a state exam 40 questions state exam right law exam only law exam because the assumption is we recognize your license you understand the principles of Real Estate all right so see what else there is in chapter one education requirements so there's two types of education requirements you have a real estate graduate and then you have a member of the bar so an attorney so an attorney has to do listen to the easier one first a four-year graduate of real estate has to do what they're they're covered throughout the whole thing so except for CE and lawyer needs Frank two and posts and post because they only Frank 2 is talking about managing a brokerage what we're doing right now right fret one is the basics of real estate which is covered in a normal law curriculum right continue education the lawyer does that through their own continuing education so they don't have to submit so they only need to post licensing for the broker course and the broker course itself uh we renew our license every two years the first cycle is 18 to 24 months it always removes March 30. first or September 30th the first cycle you have to do 45 hours post licensing it has to be done prior to that expiration that first expiration which is between 18 and 24 months if you miss it you lose your license to start all over okay if you miss broker post licensing for the equivalent GRE two and three then you can continue to your other class or no no you can't you lose your license if you don't do your post license you lose your license completely and you have to go back and start all over as a sales licensee you don't want to do that so get your CE done and you're good there's three types of status for your real estate license right you have active which is on active and selling you have voluntarily inactive and you have involuntarily inactive voluntarily inactive means I keep my education up I do everything I'm supposed to do and I just am working at a job that maybe doesn't allow me to have my license so I keep it inactive it's voluntary you've chosen to keep it that way involuntarily inactive is for a multitude of reasons you've you've got some type of spine you had a disbursement from the real estate Recovery Fund and you weren't able to pay it back right away you didn't complete your continuing education something that you're not in control of that the state's telling you you can't have your license active so less than 12 months 14 hours more than 12 months eight twenty eight hours correct right the other the other piece of this is can we reinstate an olive oil license we can and some hardship situations but don't just don't get that at that point right all right license and revocation suspension revocation revoke means what revoke means you lost your license suspended means what you can't practice until something is some obligation is taken care of I.E paying back the real estate Recovery Fund uh the other the other piece of this revocation is revocation without prejudice or is verification without prejudice revocation without prejudice means I'm not going to give you the license because you didn't take the class so for example you're taking a real estate course and they issue you a nursing license they give you a nursing license on accident they're going to revoke that and not take penalty against you because it wasn't your fault it was their fault so some type of administrative error so if you hear that ramification about president president Prejudice on tests that's what it is foreign let's see here so registration so registration is a process of submitting the information into the dbpr right licensing is what they're giving you online 183s so yeah so that was the next thing so 3fs so what is the fine for unlicensed activity felony five thousand dollars five years in jail and it's not required that they give you that but it's up to those penalties so FFF the other one is one one one which is rental lists that are outdated for a fee you what my point on that is is just don't do it just give them a rental list you don't worry about it so it's one one right thousand dollar fine one year and it's a first degree misdemeanor okay what's the difference between a group license and a multiple license a lot more information group license multiple license and I'm not going to write all the definitions on the board these are just the topics that are going to show up on the exam right group license is what it's like your Builder that has a bunch of different sites uh multiple licenses like your brokerage that has multiple offices Branch offices we call that multiple license or I maybe I own a referral company and I own a secondary brokerage and I have three different licenses that's what multiple licenses is Right Brokers can have multiple licenses true or false true answers true you have to change your business address if you move your location within 10 business days if you don't it's 500 administrative fine they call a citation here I think what are the functions of a real estate agent what are what do we do as real estate agent what is the acronym what is the what are our functions as a real estate agent do you remember the a bar sale yeah so advertising buying appraising rentings selling auction leasing exchanging property right so that's the a bar sale uh what I usually see on the exam is missing the A and it's just bar sale right advertising is a broker activity when you talk about getting compensated on a real estate transaction you get compensated commission you means you have your transactionally means you have to have a license that's very simple the thing you have to think about is it doesn't matter if you've actually got paid to be committing a crime or be committing some type of of bad bad thing right so here's the thing if somebody offers or you accept or you continue to do the job because somebody performs something you're trying to help somebody um if somebody's telling you they'll give you a bonus even though you're not licensed and you continue to work there that can be construed as not not abide by the law so just be careful just because you don't commit the ACT doesn't mean you can't get in trouble for the ACT do you remember the the Builder thing where the guy was the developer and his son worked for me didn't have a license and he couldn't sell enough houses so he's paid hourly but since he couldn't sell enough houses he's like well every fifth house I'll pay you 500 even though it never happened they're still both guilty not just the seller not just the buyer or not just the dad but both the Sony and the dad um there's four there's five different areas of real estate that we sell right we sell residential commercial industrial agricultural and business brokers right so why is the business broker why do we have their license to be a business broker because most businesses have some type of real property attached remember all that there is exemptions to the real estate license right so what are the exemptions well you can sell your own house for yourself right if you are a partner and a firm and you're only getting a program a share of the equity then you're you don't have to have a license right if you are selling cemetery lots you don't have to have a license right if you're working for a government agency who performs these activities you don't have to have a license if you're doing real estate stuff within the scope of your law within the scope of your your other business you don't have to you're not getting commission so if you're a closer closing a real estate transaction or if you're a CPA handling taxes for for somebody that's fine you just can't actually physically the won't be the one selling it if you rent mobile home lots in a mobile home park you don't have a license right there's a bunch more but those are pretty much just understand the concept is scope of work right whatever your scope of work is equals if you have to have a license or not I'll put a curve of work up here okay so scuba one that's it for chapter one questions on that all right questions we're gonna skip onto two opening a real estate office we're going to talk about business structures that most likely going to be a negative question what can and can't register as a real estate company right so you have you have things that can register corporations in general limited Partnerships limited liability corporations limited liability Partnerships and sole proprietorships where you're going to get tricked on this is where somebody says can you register a corporation soul as a real estate company no you cannot right these are the things that cannot be registered as a real estate brokerage the two that we normally see is corporations sold and joint ventures why not a joint venture well a joint venture is something you do once and then it's dissolved right a corporation soul is a church and then business trusts Cooperative associations unincorporated associations those those things cannot be real estate brokerages and there's there's obvious reasons right churches are mostly not for profit and it doesn't matter you can be a for-profit or not-for-profit but um they don't pay taxes they don't they have a totally different structure than anything else as far as business is concerned joint ventures get dissolved trust a lot of times that's investment type deal right Cooperative associations will be what we call co-ops right so co-ops are a building where they shall start and have a proprietary lease and people live there right so they're not a real estate brokerage there's residents that are unincorporated associations would be the same thing it's like an HOA we can't we're not real estate brokerages make sense all the other ones make sense as being a real estate brokerages there's the general partnership is two or more people each General person each General partner has to be a real estate broker right we talked about that all personally all people are liable so the difference between general partnership and limited partnership is this General Partners everybody involved is 100 liable for the company limited partnership means what means that I'm only limited to what my investment is so if I gave the billing that's all I'm limited to if I gave twenty thousand dollars a friend that's all I'm limited to right foreign that's basically Partnerships in a nutshell anybody's dealing with the public is presumed to be functioning as a real estate broker needs to have a license in these partnership situations we have trade names before we get on to that piece we have this thing called ostensible relationship so stats for relationship is what do you remember what essential relationship is yeah if you and I were both in the same office right so it's the presumption of the public saying that you're Partners right whether you're a partner or not if they presume that then you could be liable so we need to make sure that we have separate entrance doors write signage Etc otherwise we don't we we may or may not be accused of an extensible partnership let's see for-profit nonprofit corporations Corporation is what it's a fictitious person you can follow some chapter S is for tax filing purposes if you do you can only have a hundred stock orders you can have no more than 100 stockholders in a sub chapter X all right and we're just hitting the high points of this but um if something happens and the broker say passes away or gets into Corrections incapacitated what do we do we have this thing called a vacancy in office what is a vacancy of office anyone below that cannot practice real estate right so what do we do we feel it we have a temporary broker put in how quickly then 10 days I think it's 14 days that's 14 days right if it's not done 14 days everybody's license gets enough it gets uh involuntarily active and active right so then the temporary broker can be placed for 60 days at the end of 60 days we have to have a permanent broker in place it's not a corporation Soul we already talked about that enjoy adventure with business trusts stanceables there registering a trade name so we're going to register a trade name under a fictitious name we're going to go on the Secretary of State website or sunbiz in Florida right and we're gonna we're gonna create our fictitious name we're going to register our fictitious name we're going to file a registration with the Department of Business and Professional Regulation and then they're going to approve and get that Corporation a fictitious company a license that's how that works is a real estate associate true or false can you put your business in a fictitious name no the answer is no it's false you can only be a fictitious company if you're a real estate broker we're gonna talk about our stage Brokers offices so you don't have to be a domestic Corporation domestic Corporation means that you are in the state of Florida operating in the State of Florida your office is in the State of Florida or you could be a foreign corporation will meet you outside the state of Florida if you're outside the State of Florida you have to give permission for the dvpr to be able to look at your stuff outside of Florida all right branch office registrations are not transferable if you close a branch office and you move it to a different location you can't register that real estate broker May reopen a branch office at the same location during a license period or requesting a reissued branch office license okay these are Branch offices your corporate office has the address trained does that make sense if you have multiple offices this is what we're talking about we can't close over here and open up the other side temporary shelters so you see these mobile homes I call them mobile homes the trailers outside these construction zones if they're not conducting real estate transactions it doesn't have to be registered if they are then it does have to be registered and when you register an office you have to have three things on the side what are the three things have to be on the side name of program name of brokerage licensed um real estate license real estate broker and Brokers Bank all right so name name and LIC real estate broker or a licensed real estate broker right can you have any other abbreviations no either spelled out licensed or LIC period that's it and the man the font has to be similar size so that people can understand that if you have sales associates and you put them on the sign what do you have to do you have to separate them right you have to separate them or if you have a broker associate that you want to put on the sign you have to separate them you have to put a line through their line under it so that people understand what they're looking at for ADA compliance you also have to have what you have to have access you have to elevators you have to restrooms you have to have anything else and you have to have how many parking spaces per 25 one one okay okay so that that's pretty much looking into there it's for ADA compliance we have Team advertising so if there's team advertising we have to have one designated person on a team right it's a lot in this chapter team advertising so team advertising one designated person on the team and we need that designated person to be checked and we have to keep a registration of who else is on the team we also have to [Music] not use certain words right we have to use not we can't use like Associates or Properties or broker or company or anything like this why because that's going to give the presumption that your real estate business you're a real estate company and you're not so you're acting as a broker again team Associates do not have to have a broker's license so we need to make sure that's separate what is a blind advertisement I'll do that here and Miss Lee is I don't remember blind is missing your phone number is missing something or off of there right that you're not they're missing a name missing something off of there right advertising has to be work real real estate reasonably reasonably assumed that if I put this ad out there that I'm a real estate agent right so if I say call John Smith at a number but I don't associate with a real estate company that's also about that right you don't have enough information on there you have to have at least your last name right you have to advertise at least your last name right false advertising is putting putting uh misleading information out there pretty much you know that if you're on the internet you have to have the point of contact information immediately adjacents to the ads right or on I put it on every web page but immediately adjacent if you list your house for sale by owner you need to disclose that your real estate licensee because we have a one-up because we're licensed we understand the market we understand the business report longer right there's two things to know about rental lists what do you need to know about rental lists besides that it's a misdemeanor rental list if you give accurate information and they are unable to obtain a rental within 30 days they're entitled to how much refund 70 75 if there's anything that's inaccurate on there or are they entitled to 100 right and what are you liable for you could be liable for the 111 which is thousand dollar fine a month uh here in prison and the first degree misdemeanor for the lousy hundred bucks or the 25 bucks that you're probably gonna have to refund anyway it's just not worth it just give it to them let them do their thing give them a list and say good luck hopefully you'll find some if you need to see something let me know I'll help you find a place get paid for the referral versus getting paid for the list housing for older people so you know we didn't really go over chat uh the Fair Housing Act yet um but we talk about protective classes and we talk about familial status we can't just we can't talk about familial status with people so when these people are writing letters to the set the by the buyers are writing letters to the seller they are in effect violating the fair housing act because they're they're telling somebody their story right so we have to be careful with that as agents when somebody presents this little letter uh what is the guideline for housing for elderly people 80 percent of the units of the neighborhood like a Del Webb has to have 55 or older one or more persons 55 age or older that lives there that the way they get away with it is because 20 can be under that age and normally it starts at 45 right all units if a home is like a nursing home or a care facility has every unit older than 62 then they can discriminate against the younger people that's the only rules with familial status that we can have a fertility class or like a yeah production class so if you don't have the fair housing poster you're automatically assumed to be violating uh fair housing talk about telecommuter protection act right so one of the main things for telecommuters what's do not call so DNC I'm just going to write DNC on here the the main things are there's three things right you have early to late 8 A.M to 9pm you cannot call before 8 you cannot call after 9 pm in Florida you can call for sale by owners but federal law says you can't call for sale by owners so what does that mean we have to abide by the federal law right after melons do not call us you can call them no problem we have to maintain a registry as a brokerage that we've actually downloaded the list and it can't be some outdated list some three years ago it has to be a current list right there is exceptions to the Do Not Call List Right what are the exceptions if our previously done business with them how long do I have three three months you have 18 months you have 18 months if somebody has an inquiry has made an inquiry how long do you have oh that's in three months I mixed it sorry okay right so why isn't CMA contact up to 18 months after a business transaction is concluded ycc can call three months after an inquiry so if I had a lead come in November 15th and today's February 8th I can make that call because it's only been three months it hasn't quite been three months yet right after three months I would get a fine in Florida ten thousand dollars Federal is sixteen thousand dollars per violation don't do it email solicitations have to have opt out right if it's an individual email with somebody that's different than a spamming email right you don't want to send out spam emails senders have 10 days we then have 10 days to update our list if they want to opt out same thing with facts the fax has to have the date and time right emails have to have that too right physical address we have to provide provide a clear way to opt out you have to know who's to and from so we can't use these do not reply emails right uh same thing with the facts date and time registered name of the company phone number the company address it's pretty much it for chapter two owning and managing a real estate office is chapter three so chapter three talks about fees first thing we talk about is fees right fees are what are your initial startup costs are you renting a place are you buying a place do you need an attorney or an accountant to set up all your legal stuff right do you do you need office supplies office equipment how many people are going to be there how much Furniture you need all these things have to look into right do you need internet are you going to offer signs and lock boxes to your Associates or are they going to buy their home joining the board of realtors ultimately the broker's responsible for all the all the members if they don't join the board we have to pay right don't want to do that office supplies promotional materials forms right all these things are costs that are involved on your real estate brokerage so what the key word about Brokers is is that the keyword under broker is broke and if real estate agents want to be Brokers they need to consider all this stuff or they can become broke very quickly you have to babysit and make sure that people are being reduced and doing their continuing education making sure that they're not operating without a license there's only these things that have to happen so it's basically managing a bunch of people so if you don't want to manage a bunch of people don't become a broker or don't you can be a broker associate just don't become a broker have a business plan how many sales am I going to have to make just to break even how many sales am I going to have to make to make a hundred thousand a year whatever the case is you need to have a couple different plans and know exactly how you're going to get from one or the other just saying I need to sell 50 houses to make 100 Grand isn't enough because how am I going to sell with 50 houses am I going to break it down by agent and I'm going to have training and I'm going to have am I going to have call sessions whatever the case is right we have to have some type of plan to make it happen who are we selling to what are the opportunities what are the challenges how are we going to get there right yeah yeah all the fun stuff right talk about mission statements so income Productions income sources I like to have a goal and then have a stretch goal right so my goal is this which is some measurable it's like a smart goal it's a specific measurable right it's attainable right these are these are important whereas the stretch goal might be okay well if I do this and I want to hit 15 percent so I just multiply everything by 15 higher and then add right one of these how much are your tax is going to be are you going to rent Insurance are you going to rent furniture uh all these things are matter right are we going to get a blanket you know policy to cover 25 agents or 100 agents are we going to charge me you know fee transactionally are we going to charge a you know fee annually these are all these things you need to think about right then we have to decide are we going to be a franchise or are we going to be independent well there's pluses and minuses to both franchise franchises come with these so obviously that's a negative right but franchises come with a nice platform for internet for example a nice platform for doing business uh so there's but there's both right franchises have built-in networks for referrals they have National recognition right we're talking about the big boys right where as an independent is what I like to call a mom-and-pop shop we usually have lower overhead we have more freedom to do what things we want as long as it's in compliance we are local and we have lower startup fees so we can start up with a very small office and have agents get better splits and try to retain it through splits versus trying to retain them through brand recognition right so there's pluses and minuses on both sides I've worked on both sides I see pluses and minus on both sides usually the national companies have better training and stuff like that um then we got to talk about how we're going to keep our books are we going to are we going to log the commission at the time we write the contract which I think is horrible because deals fall through all the time or are we going to log commission at a time of closing at the time of actually receiving a check well actually receiving the money and logging the money that is called Cash basis accounting logging it at the time a transaction is called accrual based accounting right so accruing it for going forward now there's pluses and minuses to that too because it may fall on different tax year and you may have a tax advantage for that right do we need additional Personnel do we need office managers do we need support staff do we need people that will go out and do pictures and virtual tours do we need all that or are we going to Outsource that are we going to hire part-time Associates because part-time Associates are going to need more help they're going to need more of your time and they're going to do less transactions so is that the best way for you to handle it handle your business or do you want full-time people develop them let them go out on their own and make them having them do it what I'm going to say about part-times is there's no such thing as a part-time real estate agent you're either in or out you may have another job but you're still in you still have to work you still have to do everything so you can say you're part-time but you're not going to work part-time okay and you pay the same amount as a full-time I mean exactly yeah the views of the same mother yeah so then we say are we going to hire an assistant are we going to hire a licensed assistant are we going to hire an unlicensed assistant if we hire a license assistant and agents can do this as well as Brokers if we hire a license assistant we can pay them transaction we can pay them salaries with bonus we can pay them we can pay them a commission we can do whatever if we have an unlicensed associate we have to pay them hourly now the difference is and there's no bonuses no transactional pay right for an hourly unlicensed assistant unlicensed assistance can be paid either by the broker or by the sales associate but anything that's transactional pay has to be paid by the broker unlicensed agents can do all those I call them secretarial ministerial duties right they they can't do transactional stuff like writing contracts and uh showing houses they can do an open house but they're not supposed to open the door and they're not and all they can do is give out an MLs flyer they can't and take names they can't give any opinions about the house so it's kind of a grannery you might get in trouble just be careful with that right how are we going to recruit are we going to set out an advertising campaign on the Internet or are we going to do it organically these are all things that you can think about when you're opening a brokerage what type of personalities am I hiring and is it compatible with our culture all these things make a difference right are we going to make is it going to help us benefit have a mutually done I like to call it symbiosis right you have a mutual beneficial relationship okay and you're gonna have a contractor agreement you're going to have a office policies and procedures you're going to keep an HR file on all these people all these things are going to happen just like if you were running a grocery store or an office whatever the case is it's going to be the same as running real estate brokerage the only thing is we have to make sure that we're not getting we're not getting uh out of line with the Real Estate Commission right so we also can do these things like non-competes and all this but all this stuff gets into the legal piece of it they're not really going to ask that just understand it it makes if it makes sense as an office they're gonna that's how we need to look at it is it going to make sense foreign the one thing I know we didn't talk about any trust policies so what does antitrust you know antitrust is antitrust is uh I can't remember Sherman Sherman antitrust means I'm not gonna collude to have higher commissions and divvy up the area or say everybody's going to charge six percent and we're all going to agree to charge six percent no we can't do that right we can't do that if somebody wants to charge ten percent somebody wants to charge three percent that's their choice right they can't you can't sit there and say well if you take the west side and I take the east side and I refuse anybody else and we're gonna divvy this up and we're all going to agree to pay eight percent what's violation of law all right you can't do that right all right it's price fixing don't talk about it don't deal with it that's pretty much it in this chapter what I would say as a broker just to top that off is have independent contractors independent contractors are 1099 you're not collecting taxes you're not dealing with all the other IRS stuff right that that becomes a little bit hard to deal with if you have multiple multiple agents if you have four or five agents no big deal if you have 25 30 50 agents 100 agents it's going to be impossible for you to keep up with that I think that's pretty much it in there the term company dollar do you understand the term company dollar company dollar has to do with how much is the agent bringing in right aggregate gross commission income would be the agent's total income coming in so we had a 200 000 house at three percent it'll be six thousand dollars agci and let's say they're on 80 20 split they would bring in twelve hundred dollars in company dollars that's how I would figure out so that term company dollars whatever The Brokerage split is maybe there's a transaction fee on top of that so they get the 1200 RS plus the 200 transaction fee so there's fourteen hundred dollars in company that's how it works chapter four is about escrow management so before we slip off flip through all the pages we can have sales or accounts and we have Property Management accounts and we can have combined account for sales and Property Management so we can commingle how many how much in funds in a sales operating escrow account is up to five sales oh sales is one thousand dollars prop management five thousand dollars combined one thousand dollars of commandled bonds commingling means you can mix those funds in the account right so escrow account you can commandle up to a thousand dollars of personal funds in an escrow account if it's a sales account or a combined account for fees for banking etc overdrafts etc hopefully you're not overdrafting your escrow account you'd be in trouble because you shouldn't be using that money if you're using that money for something else like paying your bills and that's called conversion conversion equals stealing commingling equals mixing think about mingle what do you do when you mingle you mingle you move around you talk to people you're mixing right conversion means of taking something and making it something else right conversion is illegal communally is okay as long as it's within the guidelines established by The Real Estate Commission property Management's five thousand dollars why because you may have to upfront some repairs or something you might need a little extra money a thousand dollars might not cover it I think I mixed those so co-mingling is legal but illegal practice of co-mingling is intermingling and that's the term that's actually you're not allowed to that right so if you're co-mangling six thousand dollars in a property management account that's illegal right but here's the thing with an escrow account you're reconciling it every 30 days you're signing off on as a broker if there's any Bridge you're explaining that and you're withdrawing that right away that's how that happens that's how it works so for this reason because as for management requires extra paperwork about half the independent Brokers don't have an escrow account some states require it for does not required you have an S for account Kentucky does um the broker can be assigned on the escrow account they can also designate a bookkeeper to be a sign-on account but no matter what the broker has to sign off on the reconciliation no matter who conducts it so your account might do it but you still have you still have to sign I'll review it and sign off on it because ultimately it's your responsibility right so then we talk about how long we have when we receive a earnest money deposit binder or good faith deposit all those three terms are interchangeable what can we do with that how long do we have to have it how long can we hold it legally sales associates can hold a buyer check for one business day it has to be deposited to the broker at the end of the first business day that they receive it now remember if you receive it on Friday Friday is Day Zero Monday would be day one weekends are excluded holidays are excluded federal holidays are excluded right so first business day one day sales associate deposit and the broker has to deposit into the escrow account by the end of the third business day inclusive of that one business day so if you receive it on Friday Monday would be day one Tuesday Wednesday would be phase three foreign good so what they said Thursday Thursday or they say we got a check on Wednesday November 24th and Thursday's Thanksgiving day one would be Friday day two three Tuesday and Monday Tuesday sometimes if I got if I received a check on Tuesday that's Day Zero so Wednesday I have to have it to you right then you have Wednesday Thursday you have to deposit it by Friday unless there's always an exception right unless the seller allows you to have a post-dated check which what has to happen with a post data check the buyer and seller has to sign off on it everybody has to agree that it's okay to do this seller signs off and then you can have a pass to post it check the other way you can do it is based on a contract right so it's from the data receipt so if the contract says buyer to be received within five business days of the contract being accepted now we can start that clock at day five day five will be zero right and then one two three so it's a way to if somebody didn't get paid for they were getting paid on two-week cycle or something you could push it to where it would work right because nobody really wants to deal with the post-dated check right um the other thing is is what are we going to do with the interest you can have an interest bearing escrow account but what do we have to do we have to get signed up by our seller who's getting it and how much are they getting right my advice is don't worry about the pennies if you're a small broker because you're only going to have maybe fifty thousand dollars on an escrow account in a good in a good month if you're a big broker you might have three million dollars or four million dollars that you're drawing interest on so it might make sense to do it but remember you have to get agreement while parties to let you have the interest if you're going to do that attention to business records how long do we have to keep records five years under statute of limitations unless it's always an unless my favorite term in real estate business is to say it depends right because it always depends right so if you're under a lawsuit because you have five years to open that lawsuit so if somebody opens a lawsuit on year 4 11 and 30 days then you have to hold it for an additional two years so almost so I would say up to seven years um if you're under litigation you can do everything digital that's perfectly fine nowadays um and if it's a Peril contract which means oral it's four years right four years for a parallel contract anything that's written the problem with Peril is it's most of the time unenforceable right unless you can prove that there's a pattern if you're paying a referral if some if you're referring business somebody and they're paying your referral and they decide not to pay your referral on one transaction you can go after them under a payroll contract because you can show that it's happened right if you have this at face value this Prima Facey evidence that you can do that right just like if you had a real estate license if you have a real estate license you're presumed to be active you're presumed to be able to practice right foreign talk about monthly reconciliation you talk about how much can be in there talked about that disciplinary guidelines you can get a 500 citation if you're not maintaining your escrow account uh what happens if you have conflicting demands that's the next thing we have This Acronym This Acronym is m-a-l-e this is conflicting demands so what is what are these terms what is this conflicting demands conflicting demands means we have a cancellation a contract and we have the seller arguing with the buyer over who gets the earnest money deposit or the good face deposit or the binder or whatever you want to call it right what do we do well first of all as a broker if we're going to litigate we have to know if we if we're taking part claim to it or not right if we're taking part claim to it then we have a declaratory judgment if we're taking part claim so we have a declaratory judgment if we are not taking client to it then we defile this antipleter right this this interplayer court procedure that's litigation right but we don't want to go to litigation first we want to go to mediation right mediation is the easiest mediation is like you sit around a table with a third party or non-third party it doesn't matter you can talk amongst yourself to see if you do that now if you hire a third party to make the decision for you then that's called an arbitrator it's called arbitration it's more expensive typically it will eat up the binder and you won't get anything back anyway so mediation is more of us it's informal our that the sales associate the broker we're handling it through via text message emails whatever so we did a mediation where we sat around a Round Table and there was a third party involved but it wasn't arbitration it was a third party the title agent sitting in with us we're all talking amongst each other buyer seller lender sales associates everybody's together and we talk into mediation and we come up to an agreement that's all that matters right if you are in arbitration it could be anybody and the person that is the arbitrator could be licensed or non-licensed and they make the decision based on the Thanksgiving so if they like somebody better than somebody else they could make a decision just solely based on that you have to make sure that you're not in that situation arbitration is blinding if you see the word binding put it with arbitration you see it with a question litigation is Court procedure right we're not going to jury trial over a binder dispute but we will we will talk about ampleter says if the broker does not have Financial complaint uh Financial claim to the disputed escort funds then that gets deposited into the court registry and you file his court proceeding called an amplitter and it goes to whoever they they rule on declaratory judgment means I put out expenses I want some of the money back to reimburse myself for the cost that I have if you're a real estate broker and you have an escrow account real estate broker and you have an escrow account not lawyer with an escrow account real estate broker with an escrow account we can file for an escrow disbursement order so mediation arbitration litigation escort disbursement or Edo and we can do it through the Real Estate Commission only if it's held by a broker escrow account and in what we do in that case is we submit it over to frac we have to notify Frank within 15 days if we have good faith doubt that the parties can work it out we have to start the procedure within 30 days and these are business days right 30 days to actually start the procedures and if for some reason they decide that they're going to work it out we have to notify freck within 10 days that they worked it out we no longer need the edl right we don't want to waste the real estate commission's time if we worked it out right we don't want them reviewing something wasting their time when they can be working on something more serious so that question can be tough because there's 15 days to notify of the good faith doubt there's 30 days to start the procedure and then there's 10 days to cancel the procedure if somebody somebody decides to agree which doesn't happen that often but it does happen on occasion there are some exceptions to to Escrow disbursement order if you have a condominium and you didn't get the condo docs including the frequently asked questions within the three days of the 15 days depending on his new or existing we now can disperse those escrow funds to the buyer without a sign cancellation also if the mortgage is denied within the financing contingency period as a broker we can disperse without a cancellation now most real estate brokers aren't going to do that because they want to have something sign of writing but legally speaking Real Estate Commission rules say that we can all right hold on property well that's government stuff there's always exceptions for that as well right so it says here Hutto property are Exempted from notice of settlement sheet procedures under chapter 475 which is Real Estate Commission laws right the broker is required to follow the Hud's agreement to abide and broker participation requirements so however HUD spells it out we have to we have to abide by their rules right it's housing Urban Development supersedes the state Real Estate Commission right let's see the two things that came up here on page 120 is Condominiums and financing disburse that but most people won't have something to cover themselves because why if they get if I disperse to the fire and the seller sues me what happens I have to submit a request for the real estate Recovery Fund to cover that if I'm finding if I'm found at full then my license is going to get suspended I have to pay it back right if I'm found in the good then it's good right if I followed a disbursement order and I get sued and and the the the planet wins over May they have to try to seek judgment for me and then they send it they send a request to real estate Recovery Fund as long as the escrow disbursement aren't I can apply to this for disbursement order then I don't have to worry about license suspension so there's all these things that you want to make sure you're okay with now real estate Recovery Fund has a fee involved right it dropped when it drops to 500 500 000 we start paying into this as licensees through license fees right once it reached a million dollars we no longer pay into it right so what you're going to see is because anytime they disperse from me you know we have to pay interest you don't ever have to pay those fees as long as people aren't getting suspended and dropping out of the business and not paying a bag they actually have a question uh practice quiz did you yeah what's the max is a real estate Recovery Fund about a million dollars for the for the actual Holdings but then you can get up to fifty thousand dollars per Trend area per transaction up to three right you can get treble right and get up three transactions per associate after that you probably need to be out of the business uh most people have been in the business 20 years never have one so if you've had three you probably need to be gone you probably need to go away um let's see that's pretty much it for chapter three chapter four sorry wow that's pretty good I didn't write a whole lot on the board uh trying to keep it small because we're talking about a lot of stuff so all those inspections disciplinary process chapter five so chapter five is really the end of the book right it's the end of the bulk of how you run a real estate operas we talked about what we need as far as Furniture we talked about what we need to signage we need Staffing we need we need files we need we need to know how to handle conflicting demands all these other things right but then we didn't talk about what happens when we get inspected what happens if we hear cues of something what happens if we need disciplinary process how we deal with the Recovery Fund we did talk a little bit about the real estate Recovery Fund um 500k to one mil all right we talked about that right so first of all why is the main reason that we have to change our address in the system when we are a real estate company because we could just go out there and be wherever we want to be right well then if you mess up I think we mess up so if they're looking for us or if they're sending us a letter we have to be compliant because if they send us a letter we don't respond in time then they know that we haven't gotten our mail right now of course people like me that don't shake their mail every three weeks that's a problem too right because I don't like to check my mail but but if I'm expecting something I will now what if they send you a letter and say hey I'm coming to audit you and you didn't get it and you should and they show up and the door's locked and nobody's here well you get administrative fine right we need a citation for 500 for not changing your changing your uh your address right so it's just like your driver's license right A lot of people don't change their driver's license address within 10 days but they get pulled over and I get in trouble right so do the right thing the Real Estate Commission can first of all what is the rule what does the real estate commission do there's two things that they do first thing that they do is they Foster education right right well that's not the first thing the first thing to do is they protect the public right they're they're here to protect the public and they're here to Foster education they're here to help us educate the public so don't take a Frac out of this oh my God we're coming down to beat you up it's an education process to make you better so that we're protecting the public in ways we should be protecting if I would a lot of people think oh well an audit's a bad thing no an audit's not necessarily A Bad Thing a lot of it might tell you where your deficiencies are yeah you might get a notice of non-compliance you might get something but if you didn't know let's fix it and let's move on let's make sure we're protecting the public so we need to have a sign we need to maintain our Branch offices the first thing you're going to do is check the sign they may ask you to provide a couple files right to the review are you getting the radon disclosure signed well it's in the contract here so we always have it signed right are you getting lead-based paints on for houses prior to 1978 built prior to 78 right or are you getting Coastal construction zone line disclosures signed when they're on the beach for example right these are things we are going to review the license are your licensees acting legally and their license are inactive or have they done their continuing education all these things are important right are you providing your broker's relationship disclosures or are you functioning as a transaction broker and you don't need that right so those are things that matter right are they going to audit your escrow account absolutely they're going to check for your reconciliation that's why if you have an escrow account you need to be doing that if you haven't used your escrow account you don't have to you don't have to reconcile it because it's never used but if you use it you have to reconcile it every month for the next five years so either have one or don't have one it's up to you right so if you if you used it last year it's been 12 months it doesn't matter you have to re reconcile it every year for the next five years okay five years Okay so so then there's this whole complaint process how does it work it's kind of like a legal process right so and I'm not going to go really in depth to it some of my files a complaints say that say that you're violating for housing or whatever the case is they file a complaint and then this investigation the complaint happens right on the back end the licensee is not even notified at this point at this point then they have this probable cause determination there's a two there's a two-member probable cause panel right steps in the complaint process I'm gonna put that up here because it may be on the test foreign so they have this probable cause panel of two people right there are seven members of Frac we didn't cover that yet but we'll cover it there's seven members in fact two of them are picked to do this probable cause right and then if there's probable costs bound we're we're then we're we're then looked into further they actually formed they file this formal complaint so there's an informal complaint that comes in maybe it's Anonymous or whatever they find probable cause they file a formal complaint they don't find probable cause they close it out and they move on and they say ha ha they did the right thing right if and then once there's a formal complaint you can have an informal or you can have a formal hearing an informal hearing happens when somebody doesn't contest it right they say no little Contender I'm done I'm not test this right formal complaint you're going to have a hearing in front of Frank one once they do the formal hearing and they're you're found guilty or not guilty doesn't matter there's a spinal order that's issued right and this final order is issued and then at the very end of it there's a judicial review now who who does this by order do you remember uh yeah it wasn't it was uh it's always the court or it's a administrative law judge yeah right and that's on page 136 it's administrative law judge once that's done of course everybody's notified through this process right that the the sales associates notify the Brokers notify everybody's notified right once this file order is done then they're gonna the courts are going to issue uh some type of penalty right or as most people would do is they'd go and do some judicial appeal right they'd appeal it's a judicial review that's Frank doesn't do Criminal correct they do administrative yeah so you can get through this whole process and be cleared by the Real Estate Commission but you can still get sued Kremlin and civilly right so this is only one piece of it remember Fred deals with licensure right Frank deals with that piece they don't deal with criminal and civil law um if they found that you did something illegal criminally they're going to refer that over to Department of Law Enforcement right that term the division of administrative hearings um it's going to employ people of the poor bar that's who's going to handle the whole formal hearing process they recommended ordered is the the law judge right the recommended Oracle Frank Frank is the final order with the but the recommended order is the law judge and if you need to get more information from somebody what you do you subpoena it right that term subpoena you already know what the subpoena means so I don't need to go over that now you can get a license denial when we're going all the way back to applying for a license why would they deny your license well it could be something incomplete right it could be something that you didn't pay the fees right which are yeah that's fine we'll figure that out neglecting to your correct error so if it gave you 30 days to correct errors right then you need to correct them in a timely manner because time is of the essence or if you fail to complete one of the examinations right all these things would get you licensed denied right so they have the right to call me up and say hey did you pass the exam Furniture records right they could do that right so again it they can audit a real estate school the same as a real estate office right and come in and check all that stuff um we talked about revocation about Prejudice uh Prejudice we want me to worry about that when you talk about different types of administrative penalties we never covered a letter of reprimand so let her reprimand it's misconduct that has no discipline area action it's a letter of guidance so this isn't a very it's not common but if something happened and you didn't do something right and you say hey slap on a wrist we'll get this done uh let her wrap around letter of guidance tells you here's how you should practice in the future right we're not going to hold this against you however if you do it multiple times it could go on to an escalated level right so it could be a notice of non-compliance which you have 15 days to correct something like a sign on your door right citation something 100 to 500 is something a little bit worse than a notice of non-compliance but it's not really a threat to the public right then you have probation you have a fine suspension of revocation right fine it's going to be up to five thousand dollars yeah fines uh putting you on probation may say I need you to complete another course for example I need you to repeat course two because you did something wrong whatever the case is suspension means I could take your license for up to 10 years for whatever reasons right if it's something that's really bad and then revocation is permanent if you do fraud if you run a Ponzi scheme if you do all these other things that are Financial crimes they're going to revoke your license you're never getting it back they revoke one license they're going to revoke them all whether it's Florida Alabama Georgia you know New England wherever it is right so the next piece administrative 500 5 000 she talked about that your penalties the FFF and the 111 don't worry about second degree misdemeanor um unlicensed practice real estate is a penalty is a felony in a state of Florida five thousand dollar five to five years in prison real estate recovery from we talked about that a little bit a couple things that we have to do they have to follow civil lawsuit against you they have to obtain judgment they have to try to take claim on judgment and it's a licensee files bankruptcy the commission can waive that final judgment requirement there has to be an affidavit there there's a bunch of other things you have to do um Keys here is if you're a member of that transaction a real estate agent cannot take a claim on real estate Recovery Fund if they're acting it as a licensee at all if they're acting as a consumer they can but if they're acting as a licensee they can't right so for example if I'm a for sale by owner and I'm only acting for the sale of the house I'm not I'm selling it by owner I'm not using my license or anything than this it's there's a situation that you might be able to claim on real estate Recovery Fund something were to go wrong right but if you're selling for somebody else you can't right they can claim against you now your spouse can't claim against you because what if you're under or situation they don't like you right um maximum payments are 50 000 up to 150 000 if there's three right we talked about those the licensee fees are a dollar fifty for sales associates and 350 for broker Associates if our Brokers and Brokers Associates if they had the need for that we already talked about there's hardly ever a need for that if you commit a crime you have 30 days to what you have 30 days to report it right and I'm not talking about I'm not talking about traffic violations they're talking about major stuff right um it didn't talk where is the fund reimbursement for there is a mandatory suspension if you do have yeah 147 is mandatory suspension I was trying to find the part about who can make a claim you should remember if you are prior to that transaction they can't claim against you unless you're acting as a licensee and solely as like if you're acting you can't make a claim like real estate agents can't make a claim unless they are acting only as the consumer so I guess here's an example I buy a house right I buy a house as a consumer and I'm working solely as a consumer I'm not representing myself as an agent I'm buying from a builder right there's a site agent that's representing the Builder and there's nobody representing me as the agent am I getting commission or anything that's when I can make a claim right if something were to go wrong chapter five that's part one