1. BROKER OWNERS OVERVIEW Paula K. Savard, ABR,CRB,CRS,GRI,E-PRO PSAVARD@REALTOR.COM

2. Objectives of webinar To review areas of Policy that should be address by real estate firmsTo review areas of Policy that should be address by real estate firms Some are advisedSome are advised Some are legislated such as Agency and Written Information Security Policy.Some are legislated such as Agency and Written Information Security Policy. Prime value of a manual is for the consistency of providing services to clients and customers of the firm.Prime value of a manual is for the consistency of providing services to clients and customers of the firm.

3. Table of Contents Office Policy Manual AdvertisingAdvertising Agency Policy with ClientsAgency Policy with Clients Associate Agreement As Part of the PolicyAssociate Agreement As Part of the Policy Business CardsBusiness Cards Buyer AgencyBuyer Agency

4. Table of Contents Office Policy Manual Buyer client file contentsBuyer client file contents Caravan Caravan Checklists Checklists Closings Closings Code of Ethics Code of Ethics

5. Table of Contents Office Policy Manual Commission ScheduleCommission Schedule Cooperative Sales with Outside Offices Cooperative Sales with Outside Offices Company.. Legal Entity.. DBA Company.. Legal Entity.. DBA Deposits Deposits Designated Agency Designated Agency Director of Marketing Director of Marketing Dual agency with Informed Consent Dual agency with Informed Consent

6. Table of Contents Office Policy Manual Education Policy for Tuition ReimbursementEducation Policy for Tuition Reimbursement Escrow Policy from Deposit to ClosingEscrow Policy from Deposit to Closing FacilitatorFacilitator History of the CompanyHistory of the Company Lender PolicyLender Policy

7. Table of Contents Office Policy Manual Listing Policy and ProcedureListing Policy and Procedure Marketing and the Marketing Manager Marketing and the Marketing Manager Menu of Services Menu of Services Offers to Purchase Offers to Purchase Office Conference Center Office Conference Center Open House Central Open House Central

8. Table of Contents Office Policy Manual Previous Client DiscountPrevious Client Discount Realtors Realtors Realty Guild Realty Guild Records Records Referral Policy Referral Policy Seller Agency Seller Agency Showing Policy Showing Policy

9. Table of Contents Office Policy Manual Structure of a Real estate transactionStructure of a Real estate transaction TeamsTeams Training and Thursday MeetingsTraining and Thursday Meetings Voice MailVoice Mail

10. End of table of contents Real estate is a practice. Habit forming good systems is needed toReal estate is a practice. Habit forming good systems is needed to Succeed and achieve in the real estate industry.Succeed and achieve in the real estate industry. We offer systems. The individual associate must form consistent habits For their own success and oursWe offer systems. The individual associate must form consistent habits For their own success and ours This is a recipe book. Like all recipes, the ingredients can be modified somewhat, with good judgment, without altering the original intended result.This is a recipe book. Like all recipes, the ingredients can be modified somewhat, with good judgment, without altering the original intended result. Property of Paula K Aberman Associates, IncProperty of Paula K Aberman Associates, Inc

11. AGENCY POLICY THIS WAS PART OF THE 2005 LEGISLATION REGARDING RELATIONSHIPS WITH CONSUMERS IN MASSACHUSETTS;THIS WAS PART OF THE 2005 LEGISLATION REGARDING RELATIONSHIPS WITH CONSUMERS IN MASSACHUSETTS; RELATIONSHIP DISCLOSURE AND OFFICE POLICY OPTIONS RELATIONSHIP DISCLOSURE AND OFFICE POLICY OPTIONS BROKER OWNERS WERE REQUIRED TO SELECT AN AGENCY POLICY FOR THEIR LICENSEES TO PROVIDE AND DISCLOSE AT THE FIRST PERSOAL MEETING WITH A CONSUMER.BROKER OWNERS WERE REQUIRED TO SELECT AN AGENCY POLICY FOR THEIR LICENSEES TO PROVIDE AND DISCLOSE AT THE FIRST PERSOAL MEETING WITH A CONSUMER.

12. TOPICS FOR AGENTS GUIDANCE ADVERTISING.. THIS SHOULD ADDRESS YOUR FIMS MARKETING PROGRAM FOR THE AGENTS TO BE ABLE TO PRESENT TO PROSPECTIVE SELLER CLIENTS DURING LISTING PRESENTATION.ADVERTISING.. THIS SHOULD ADDRESS YOUR FIMS MARKETING PROGRAM FOR THE AGENTS TO BE ABLE TO PRESENT TO PROSPECTIVE SELLER CLIENTS DURING LISTING PRESENTATION. HOW DO YOU MARKET YOUR FIRMS LISTINGS?HOW DO YOU MARKET YOUR FIRMS LISTINGS? WHO PAYS FOR WHAT?WHO PAYS FOR WHAT?

13. PICK YOUR POLICY..UPDATE YOUR OP MANUAL 2005 Disclosure… Seller agency, Buyer Agency, Dual Agency with informed consent, Designated Agency, Facilitator.2005 Disclosure… Seller agency, Buyer Agency, Dual Agency with informed consent, Designated Agency, Facilitator. Does everyone in the firm have a fiduciary duty to advocate for each and every client of the firm? ORDoes everyone in the firm have a fiduciary duty to advocate for each and every client of the firm? OR Does the individual agent and their supervising broker have the fiduciary duty to advocate for their designated client?Does the individual agent and their supervising broker have the fiduciary duty to advocate for their designated client?

14. Dual Agency in Massachusetts An individual agrees to represent both the buyer and the seller in the same transaction.An individual agrees to represent both the buyer and the seller in the same transaction. Buyer and Seller must each have knowledge of dual representation and consent to it in writing.Buyer and Seller must each have knowledge of dual representation and consent to it in writing. The individual agent is a dual agentThe individual agent is a dual agent The firm with whom the individual agent is associated is a dual agent.The firm with whom the individual agent is associated is a dual agent.

15. Office Policies/ Legal Issues for Designated Agency appointments by a broker or salesperson of an agent of the firm to represent a seller or a buyer shall not limit the liability of that appointing broker or salesperson for any breach of duty by the designated agent.appointments by a broker or salesperson of an agent of the firm to represent a seller or a buyer shall not limit the liability of that appointing broker or salesperson for any breach of duty by the designated agent. appointments of Designated agents to represent the seller or the buyer shall extend only to those Designated agents appointed by the designated broker or salesperson AND CONSENTED TO BY THE SELLER OR BUYER.appointments of Designated agents to represent the seller or the buyer shall extend only to those Designated agents appointed by the designated broker or salesperson AND CONSENTED TO BY THE SELLER OR BUYER.

16. Handling Financial Disputes MediationMediation ArbitrationArbitration Procuring CauseProcuring Cause In House Disputes Agent to Broker Agent to AgentIn House Disputes Agent to Broker Agent to Agent

17. OFFICE POLICY OPTIONS Single Agency.. Only buyersSingle Agency.. Only buyers only sellers only sellers Dual Agency with informed consent Every Agent in my firm represents every client of my firmDual Agency with informed consent Every Agent in my firm represents every client of my firm Designated Agency the agent is the only for the client/all other agents can represent the other side of the transactionDesignated Agency the agent is the only for the client/all other agents can represent the other side of the transaction FacilitationFacilitation

18. Associate agreement Start dateStart date End Date… renew annually or self renewEnd Date… renew annually or self renew Should agree to REALTOR membership, MLS membership and payment of those fees,Should agree to REALTOR membership, MLS membership and payment of those fees, Should agree to adhere to Office Policy Manual a copy of which remains the property of the firm.Should agree to adhere to Office Policy Manual a copy of which remains the property of the firm. Should reiterate the IRS language maintaining the independent contractor relationshipShould reiterate the IRS language maintaining the independent contractor relationship

19. Associate agreement Should address commission splits for Listing, Selling in both in house and cooperative transactionsShould address commission splits for Listing, Selling in both in house and cooperative transactions Should address policy for commission rebates, legal fees involving transaction within which the associate participated and deductibles for Error and Ommission in the event a legal issue is handled by E&OShould address policy for commission rebates, legal fees involving transaction within which the associate participated and deductibles for Error and Ommission in the event a legal issue is handled by E&O Should agree on exit strategy if associate breach prior to expirationShould agree on exit strategy if associate breach prior to expiration

20. Client Issues Escrow AccountsEscrow Accounts Signatories on ContractsSignatories on Contracts Deposits, requirements, timely tracking.Deposits, requirements, timely tracking.

21. Closing Finances Payments to Cooperating FirmsPayments to Cooperating Firms Payments to Agents within the firmPayments to Agents within the firm 1099s1099s

22. Code of ethics On an annual basis the Realtor Code of Ethics is added to the policy manual, since the Associate has agreed to adhere to and abide by in the Associate agreement.On an annual basis the Realtor Code of Ethics is added to the policy manual, since the Associate has agreed to adhere to and abide by in the Associate agreement.

23. Record Retention What you must save and for how longWhat you must save and for how long Accounting suggestionsAccounting suggestions Safe storage and strategies for online communications, legality of suchSafe storage and strategies for online communications, legality of such Mechanism for providing all parties copies of agreements.Mechanism for providing all parties copies of agreements.

24. MEDIATIONMEDIATION A voluntary process in which disputing parties meet with a mediator appointed by the Association to create a mutually acceptable resolution of the dispute, rather than having a decision imposed by an arbitration hearing panel.A voluntary process in which disputing parties meet with a mediator appointed by the Association to create a mutually acceptable resolution of the dispute, rather than having a decision imposed by an arbitration hearing panel. HANDLING FINANCIAL DISPUTES

25. MEDIATION Mediation can occur before or after the Grievance Committee reviews requests for arbitration, depending on local Association policy.Mediation can occur before or after the Grievance Committee reviews requests for arbitration, depending on local Association policy. If a dispute is resolved in mediation, the parties sign an agreement spelling out the terms of the settlement, and no arbitration hearing is held.If a dispute is resolved in mediation, the parties sign an agreement spelling out the terms of the settlement, and no arbitration hearing is held.

26. ARBITRATION Arbitration: Basic IssueArbitration: Basic Issue Is there an arbitrable issue, that is, a money dispute?Is there an arbitrable issue, that is, a money dispute? Typically a dispute over which REALTOR is entitled to the cooperative commission in a transaction.Typically a dispute over which REALTOR is entitled to the cooperative commission in a transaction.

27. ARBITRATION The Arbitration ProcessThe Arbitration Process Request filed.Request filed. Arbitration is conducted under Article 17 of the Code of Ethics and the state arbitration statute (if any).Arbitration is conducted under Article 17 of the Code of Ethics and the state arbitration statute (if any).

28. ARBITRATION Article 17 provides that arbitration occurs under the following circumstances:Article 17 provides that arbitration occurs under the following circumstances: Contractual disputes or specific non- contractual disputesContractual disputes or specific non- contractual disputes (see Standard of Practice 17-4); (see Standard of Practice 17-4); Between REALTORS (principals) associated with different firms;Between REALTORS (principals) associated with different firms; Arising out of their relationship as REALTORSArising out of their relationship as REALTORS

29. ROLE OF GRIEVANCE COMMITTEE zCommittee performs a screening function similar to review of ethics complaints. zKey question for the Grievance Committee: If the allegations in the request for arbitration were taken as true on their face, is the matter at issue related to a real estate transaction and is it properly arbitrable, i.e. is there some basis on which an award could be based? If the allegations in the request for arbitration were taken as true on their face, is the matter at issue related to a real estate transaction and is it properly arbitrable, i.e. is there some basis on which an award could be based?

30. PROFESSIAL STANDARDS HEARING PANEL Function is to conduct a full due process hearing with sworn testimony, witnesses and evidence.Function is to conduct a full due process hearing with sworn testimony, witnesses and evidence. Hearing Panel is comprised of members of the Professional Standards Committee.Hearing Panel is comprised of members of the Professional Standards Committee.

31. PROFESSIONAL STANDARDS HEARING After the hearing, the Hearing Panel decides which REALTOR is entitled to the award (typically a disputed commission in a transaction), proven by a preponderance of the evidence.

32. PAYMENT OF THE AWARD Generally, the award of the Panel in an arbitration case can be judicially enforced if not paid by the non- prevailing party.Generally, the award of the Panel in an arbitration case can be judicially enforced if not paid by the non- prevailing party. Some associations have procedures requiring that awards by deposited with the association pending review of the hearing process or during legal challenge.Some associations have procedures requiring that awards by deposited with the association pending review of the hearing process or during legal challenge.

33. IN HOUSE DISPUTES Broker to agentBroker to agent Associate Agreement signed by the Broker and agent, start and stop dates, automatically renewable unless notice is given, when agent is to be paid, what percentage of each transaction, independent contractor verbiage, referral feesAssociate Agreement signed by the Broker and agent, start and stop dates, automatically renewable unless notice is given, when agent is to be paid, what percentage of each transaction, independent contractor verbiage, referral fees

34. IN HOUSE DISPUTES Agent to AgentAgent to Agent Unless written agreement, between agents within a firm, Broker agent agreement prevails.Unless written agreement, between agents within a firm, Broker agent agreement prevails. Memo to Broker from referring agent prior to closing, signed by receiving agent.Memo to Broker from referring agent prior to closing, signed by receiving agent.

35. ESCROW ACCOUNT (10) Client Funds :(10) Client Funds : (a) Escrow Accounts. Unless otherwise agreed to in writing by the parties in transactions involving the sale, purchase, renting or exchange of real property, all money of whatever kind and nature paid over to a real estate broker to be held during the pendency of a transaction shall be IMMEDIATELY deposited in a bank escrow account and such broker shall be responsible for such money until the transaction is either consummated or terminated, at which time a proper account and distribution of such money shall be made..(a) Escrow Accounts. Unless otherwise agreed to in writing by the parties in transactions involving the sale, purchase, renting or exchange of real property, all money of whatever kind and nature paid over to a real estate broker to be held during the pendency of a transaction shall be IMMEDIATELY deposited in a bank escrow account and such broker shall be responsible for such money until the transaction is either consummated or terminated, at which time a proper account and distribution of such money shall be made.. An escrow account is an account where the broker deposits and maintains the money of other parties in a real estate transaction and such broker has no claim to such money. An escrow account may be interest or non- interest bearing but where it is interest bearing the broker must make a proper account of such interest at either the consummation or termination of the transactionAn escrow account is an account where the broker deposits and maintains the money of other parties in a real estate transaction and such broker has no claim to such money. An escrow account may be interest or non- interest bearing but where it is interest bearing the broker must make a proper account of such interest at either the consummation or termination of the transaction

36. ESCROW ACCOUNT b) Record Keeping. Every broker shall keep a record of funds deposited in his/her escrow accounts, which records shall clearly indicate the date and from whom the broker received the money, date deposited along with the source of the money and check number, date of withdrawal with the name of the person receiving such withdrawal, and other pertinent information concerning the transaction and shall clearly show for whose account the money is deposited and to whom the money belongs. Every broker shall also keep a copy of each check deposited into and withdrawn from the escrow account for a period of THREE(3) YEARS from the date of issuance. All such funds and records shall be subject to inspection by the Board or its agentsb) Record Keeping. Every broker shall keep a record of funds deposited in his/her escrow accounts, which records shall clearly indicate the date and from whom the broker received the money, date deposited along with the source of the money and check number, date of withdrawal with the name of the person receiving such withdrawal, and other pertinent information concerning the transaction and shall clearly show for whose account the money is deposited and to whom the money belongs. Every broker shall also keep a copy of each check deposited into and withdrawn from the escrow account for a period of THREE(3) YEARS from the date of issuance. All such funds and records shall be subject to inspection by the Board or its agents

37. ESCROW ACCOUNT (c) Salespersons Prohibited from Holding Funds. A real estate salesperson or broker engaged by another broker shall immediately turn over all deposit money or other money received to such employing broker. No salesperson shall at any time hold client funds.(c) Salespersons Prohibited from Holding Funds. A real estate salesperson or broker engaged by another broker shall immediately turn over all deposit money or other money received to such employing broker. No salesperson shall at any time hold client funds.

38. Signatories on contracts Bi Lateral AgreementsBi Lateral Agreements Listing agreement… who signs ? agent for firm and owner of propertyListing agreement… who signs ? agent for firm and owner of property Buyer Agency agreements.. Who signs ? agent for firm and buyer clientBuyer Agency agreements.. Who signs ? agent for firm and buyer client Offer to Purchase/Purchase and Sales who signs? Buyer and SellerOffer to Purchase/Purchase and Sales who signs? Buyer and Seller

39. 1099 TAX FORMS Shall be issued by the Broker to agents whose licenses are assigned to Firm or individual Brokers license no later than January 31, of the following year.Shall be issued by the Broker to agents whose licenses are assigned to Firm or individual Brokers license no later than January 31, of the following year. No need to send 1099 for Fees paid to other firms which are incorporated.No need to send 1099 for Fees paid to other firms which are incorporated. Individual Brokers licensees paid in cooperative transaction should be sent 1099Individual Brokers licensees paid in cooperative transaction should be sent 1099

40. Internet Standard of Practice 12-5 Realtors ® shall not advertise nor permit any person employed by or affiliated with them to advertise listed property in any medium (e.g., electronically, print, radio, television, etc.) without disclosing the name of that Realtor ® s firm in a reasonable and readily apparent manner. (Adopted 11/86, Amended 1/07) Standard of Practice 12-5 Realtors ® shall not advertise nor permit any person employed by or affiliated with them to advertise listed property in any medium (e.g., electronically, print, radio, television, etc.) without disclosing the name of that Realtor ® s firm in a reasonable and readily apparent manner. (Adopted 11/86, Amended 1/07)

41. INTERNET Standard of Practice 12-8 The obligation to present a true picture in representations to the public includes information presented, provided, or displayed on Realtors ® web sites. Realtors ® shall use reasonable efforts to ensure that information on their web sites is current. When it becomes apparent that information on a Realtor ® s web site is no longer current or accurate, Realtors ® shall promptly take corrective action. (Adopted 1/07) Standard of Practice 12-8 The obligation to present a true picture in representations to the public includes information presented, provided, or displayed on Realtors ® web sites. Realtors ® shall use reasonable efforts to ensure that information on their web sites is current. When it becomes apparent that information on a Realtor ® s web site is no longer current or accurate, Realtors ® shall promptly take corrective action. (Adopted 1/07)

42. INTERNET Standard of Practice 12-9 Realtor ® firm web sites shall disclose the firms name and state(s) of licensure in a reasonable and readily apparent manner. Web sites of Realtors ® and non-member licensees affiliated with a Realtor ® firm shall disclose the firms name and that Realtor ® s or non-member licensees state(s) of licensure in a reasonable and readily apparent manner. (Adopted 1/07) Standard of Practice 12-9 Realtor ® firm web sites shall disclose the firms name and state(s) of licensure in a reasonable and readily apparent manner. Web sites of Realtors ® and non-member licensees affiliated with a Realtor ® firm shall disclose the firms name and that Realtor ® s or non-member licensees state(s) of licensure in a reasonable and readily apparent manner. (Adopted 1/07)

43. Standard of Practice 12- 10 Realtors ® obligation to present a true picture in their advertising and representations to the public includes the URLs and domain names they use, and prohibits Realtors ® from: Realtors ® obligation to present a true picture in their advertising and representations to the public includes the URLs and domain names they use, and prohibits Realtors ® from: 1) engaging in deceptive or unauthorized framing of real estate brokerage web sites; 1) engaging in deceptive or unauthorized framing of real estate brokerage web sites;

44. Standard of Practice 12- 10 2) manipulating (e.g., presenting content developed by others) listing content in any way that produces a deceptive or misleading result; or 3) deceptively using metatags, keywords or other devices/ methods to direct, drive, or divert Internet traffic, or to otherwise mislead consumers. (Adopted 1/07) 2) manipulating (e.g., presenting content developed by others) listing content in any way that produces a deceptive or misleading result; or 3) deceptively using metatags, keywords or other devices/ methods to direct, drive, or divert Internet traffic, or to otherwise mislead consumers. (Adopted 1/07)

45. Standard of Practice 12- 11 Standard of Practice 12- 11 Realtors ® intending to share or sell consumer information gathered via the Internet shall disclose that possibility in a reasonable and readily apparent manner. (Adopted 1/07) Realtors ® intending to share or sell consumer information gathered via the Internet shall disclose that possibility in a reasonable and readily apparent manner. (Adopted 1/07)

46. RECORD KEEPING Consent formsConsent forms Must be signed by the buyer and the seller and must be kept for a minimum of 3 yearsMust be signed by the buyer and the seller and must be kept for a minimum of 3 years All agent of the firm should be checking the same box in the disclosure form.All agent of the firm should be checking the same box in the disclosure form. CONFLICT OF INTEREST if agents from the same firm disclose single agency and designated agencyCONFLICT OF INTEREST if agents from the same firm disclose single agency and designated agency

47. Understanding Fees Associates Agreement within the firmAssociates Agreement within the firm Agent participation onlineAgent participation online Accepting and offering referral fees onlineAccepting and offering referral fees online Internet based consumer mining in other license jurisdictionsInternet based consumer mining in other license jurisdictions

48. WISP Formulating A Comprehensive Written Information Security Program WISP Formulating A Comprehensive Written Information Security Program

49. WISP COMMONWEALTH OF MASSACHUSETTS OFFICE OF CONSUMER AFFAIRS AND BUSINESS REGULATION 10 Park Plaza – Suite 5170, Boston MA 02116 (617) 973-8700 FAX (617) 973-8799 www.mass.gov/consumer COMMONWEALTH OF MASSACHUSETTS OFFICE OF CONSUMER AFFAIRS AND BUSINESS REGULATION 10 Park Plaza – Suite 5170, Boston MA 02116 (617) 973-8700 FAX (617) 973-8799 www.mass.gov/consumer

50. wisp personal information means a Massachusetts resident's first name and last name or first initial and last name in combination with any one or more of the following data elements that relate to such resident: (a) Social Security number; (b) driver's license number or state-issued identification card number; or (c) personal information means a Massachusetts resident's first name and last name or first initial and last name in combination with any one or more of the following data elements that relate to such resident: (a) Social Security number; (b) driver's license number or state-issued identification card number; or (c) financial account number, or credit or debit card number, with or without any required security code, access code, personal identification number or password, that would permit access to a residents financial account; provided, however, that personal information shall not include information that is lawfully obtained from publicly available information, or from federal, state or local government records lawfully made available to the general public.financial account number, or credit or debit card number, with or without any required security code, access code, personal identification number or password, that would permit access to a residents financial account; provided, however, that personal information shall not include information that is lawfully obtained from publicly available information, or from federal, state or local government records lawfully made available to the general public.

51. wisp II. PURPOSE: II. PURPOSE: The purpose of the WISP is to: (a) Ensure the security and confidentiality of personal information; (b) Protect against any anticipated threats or hazards to the security or integrity of such information (c) Protect against unauthorized access to or use of such information in a manner that creates a substantial risk of identity theft or fraud.The purpose of the WISP is to: (a) Ensure the security and confidentiality of personal information; (b) Protect against any anticipated threats or hazards to the security or integrity of such information (c) Protect against unauthorized access to or use of such information in a manner that creates a substantial risk of identity theft or fraud.

52. wisp (1) identify reasonably foreseeable internal and external risks to the security, confidentiality, and/or integrity of any electronic, paper or other records containing personal information; (2) assess the likelihood and potential damage of these threats, taking into consideration the sensitivity of the personal information; (3) evaluate the sufficiency of existing policies, procedures, customer information systems, and other safeguards in place to control risks; (4) design and implement a WISP that puts safeguards in place to minimize those risks, consistent with the requirements of 201 CMR 17.00; and (5) regularly monitor the effectiveness of those safeguards:(1) identify reasonably foreseeable internal and external risks to the security, confidentiality, and/or integrity of any electronic, paper or other records containing personal information; (2) assess the likelihood and potential damage of these threats, taking into consideration the sensitivity of the personal information; (3) evaluate the sufficiency of existing policies, procedures, customer information systems, and other safeguards in place to control risks; (4) design and implement a WISP that puts safeguards in place to minimize those risks, consistent with the requirements of 201 CMR 17.00; and (5) regularly monitor the effectiveness of those safeguards:

53. wisp Where do you have Written Information that you need to secure?Where do you have Written Information that you need to secure? Hard copy files, computer files…?Hard copy files, computer files…? Write a policy for its protection to be included in your company Office policy Manual.Write a policy for its protection to be included in your company Office policy Manual. Have all agents sign the policy and agree to its compliance.Have all agents sign the policy and agree to its compliance.