11.1 Closing Disbursement Policy
- 11.1.2 Processing Checklist
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11.1.3 Required Closing Documents for Payment of Commissions
- 11.1.4 Depositing Commission Checks
11.2 File Review Process
11.3 Electronic Communications and Electronic Signatures
11.4 File storage and retention
11.5 Referral payments between agents
11.6 Necessity for Complete Office Records
11.7 Referral Procedures
11.1 Closing Disbursement Requirements
A transaction is only considered closed and ready for disbursement when all of the following conditions are met:
1.) A file that is compliant with State license law regulations and Key Realty’s policies.
[REF. 11.1.2 Processing Checklist, 11.1.3 Required Closing Documents for Payment of Commissions]
2.) The funds have been deposited and posted within Key Realty’s commission account. [REF. 11.1.4 Depositing Commission Checks]
Once a file is reviewed for compliance and meets the Closing Disbursement Requirements, the folder will be marked as APPROVED and ready for disbursement to the agent(s). [REF 11.1.2 Processing Checklists, 11.1.3 Required Closing Documents for Payment of Commissions]
11.1.2 Processing Checklists
File processing checklists are available for each stage of a transaction, (Listing, Sales & Closing). The checklists are located in the electronic template folder for each stage.
Associates are to use these checklists and provide all noted required documents when preparing their files. If unable to obtain a document from the other party, ensure that the document with your client’s signature, if applicable, is in your file, along with documentation of your attempt to obtain the required document from the other party.
11.1.3 Required Closing Documents for Payment of Commissions
The following documents are considered legally required for the payment of commissions and must be completed properly. These documents are subject to change in accordance with State and Local Laws.
- Fully Executed Purchase Agreement
- Agency Disclosure Statement
- Buyer Advisory (if representing the buyer)
- Final Signed HUD/Closing Statement
11.1.4 Depositing Commission Checks
For closings where a paper commission check is issued by the closing company, the agent is responsible for depositing the check into the commission account for the Key Realty Regional Office they are associated with for that transaction.
11.2.1 File Review
The order in which transaction folders are reviewed is as follows:
1st Level Priority - Closing Folders: Each business day, closing folders that have a compliant and approved listing folder (if applicable) and a sales folder.
Keep in mind, the closing folder cannot be reviewed if your sales and or listing folders have not yet been approved.
2nd Level Priority - Sales Folders: After closing folders are approved and the commission payout process has been completed, sales folders in the review queue will be reviewed.
3rd Level Priority - Listing Folders: Listing folders are reviewed 2-3 times during the week. Please note that it may take 2-3 days for your listing folder to be reviewed. You do not need to resubmit your listing folder.
Files returned to an agent for correction and then re-submitted by the agent, will be re-reviewed within 1 business day from the date re-submitted.
11.2.2 Electronic Payment of Commissions
Files that meet the Closing Disbursement Requirements will be processed for payment the same business day. An electronic (ACH) payment to the agent will be initiated. The amount of the commission due to the agent is determined by the agent’s current cap program. [REF. 10.1.2 Annual Brokerage Fee]
When we initiate an ACH transfer, the effective date is always the following business day. Payments posting to your account will depend on your financial institution's processing time. This may be 1-3 business days excluding banking holidays.
11.3 Electronic Communications and Electronic Signatures
Electronic signatures and/or initials are valid and legally enforceable in the states where Key Realty is operational.
Email correspondence from a client should not be forwarded to the other party or other party’s agent as they could be considered a binding contract if the client expresses willingness to accept certain terms.
A signed electronic correspondence, i. e. emails, could be deemed a valid agreement, therefore, a standard disclaimer clearly stating that the content may not be deemed an offer, counter-offer, terms of a purchase or lease, or any other binding contract communication must be included in every email communication.
11.4 File Storage and Retention
It is critical that the broker has current copies of all documents and files. To accomplish this, current copies of all documents will be kept in the agent electronic storage account under the agent profile linked to his/her Key Realty regional office. Changes, updated and executed documents must be entered into electronic storage account as soon as possible.
All records that have to do with buyers, listings, agency, appraisals, leases, the hope of obtaining listings, offers made or received, contracts that have closed, as well as offers or contracts that have fallen through are to be kept in a file. Copies of all letters, contracts, and agreements pertaining to real estate, (including text messages and emails) regardless of whether they are written by our associates or others, shall be placed in the file. This is the only protection you and the company have in the event of a lawsuit. Full knowledge of every case is important. There is no excuse for the violation of this guideline by any associate.
Files must be submitted to the broker’s administrative staff at each of the three stages of a transaction (Listing, Sales, and Closing). Files shall be submitted within 48 hours of having all fully executed documents for each of the three stages. If a file is returned due to non-compliance, the agent shall promptly address any issues with the file and re-submit in a timely manner. Failure to follow company file processing, storage, and retention policy may result in mandatory training or dismissal.
11.5 Referral payments between agents
There are circumstances under which one associate may refer a buyer or seller to another and relinquish all future claims except for a referral fee when and if the transaction is closed. In this event, it is required that a form be completed by the referred agent. This will increase the likelihood that a transaction may be concluded. The Company will not be responsible for handling the accounting and disbursement of referral fees unless it is advised of agreements in writing as outlined herein. Under no circumstances shall an agent pay a commission to another agent or brokerage directly.
11.6 Necessity for Complete Office Records
Copies of all letters pertaining to real estate, regardless of whether they are written by the salesperson or others, as well as copies of all contracts and agreements, shall be placed in the proper Dotloop file. This is the only protection that you, the salesperson, and your broker have in the event of a lawsuit and full knowledge of the case is important. There shall be no excuse for the violation of this rule by a salesperson.
11.7 Referral Procedures
11.7.1 Outgoing Referrals
Referrals to agents outside of the company shall be in writing with a return
receipt requested by the referring Key agent and an electronic file shall immediately be established with appropriate signatures executed by all parties to this agreement. It should be noted that the referring agent should follow up at least 2 to 4 times a month requesting a client status report in writing from the referral recipient. The chances that the referral will result in a consummated transaction and agent income increase exponentially with professional and appropriate follow-up from the referring agent.
11.7.2 Incoming Referrals
Incoming referrals to agents within Key Realty shall be processed in writing and shall include a completed W-9 for the referring agent's company. An electronic file should be established immediately with appropriate signatures executed by all parties to this agreement. This incoming referral agreement should provide specific details regarding client the status and compensation to be provided to the referring real estate entity
Agents are reminded that payment of any referral commission to any agent for any reason directly and outside of the company is a violation of company policy, this agreement, and real estate license law.
11.7.3 Referrals inside of Key Realty
Referrals between agents within Key Realty shall be processed in writing and
an electronic file immediately established with appropriate signatures executed by all parties to this agreement. This referral agreement should provide specific details regarding client the status and compensation to be provided to the referring Key Realty agent. This is an area where miscommunication, misinterpretation, and problems between friends can result. As an example, if a Key agent goes on vacation after just meeting a buyer and refers their friend/Key Agent a buyer to “just show one house.”
The buyer then requests to see 12 additional properties while the referring agent is still on vacation, buys one and there is a $10,000 commission produced. Whose commission is it? This kind of circumstance should be addressed with the referral agreement between the two agents to avoid hurt feelings and damaged relationships. This is a situation where Key Management is asked to sort out an impossible situation. If the agreement is not stipulated and in writing, the managing broker or partner is placed in a position where a resolution on an undocumented referral agreement is impossible.