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Documenting Paperwork You Turn In To Your Office- Agent Fined For Bad Attitude

By Jeff Pearl

Real Estate Agent with RE/MAX Distinctive / LIC in VA

December 09, 2011 01:38 AM

This story appears in the NOV / DEC issue of Commonwealth magazine in VA. Names are changed for this blog post. The story is about an agent for XY Realty that had a client named PJ Buyer that was buying a home. The deal fell through. All parties signed a realease, and EMD was returned to PJ Buyer. BUT, XY Realty discovers that EMD deposit was never received-only an emailed copy of the check. The agent just ASSUMED that his/her client would follow up his emailed copy of the check by sending in the actual check, but agent never verified that actual check was delivered. Agents principal broker immediately reports the violation.

During agents interviews with Real Estate Board, agent blamed the mistake on the office, saying he/she depended on the office staff to make sure EMD deposits were received. " Anytime I forgot or didn't submit something to my office in a timely manner, I was always called immediately," he/she said, "although the Board pointed out that a follow-up phone call would have ensured that the deposit was in hand." The agents handling of the Board interview didn't help his/her case. "According to reports, agents demeanor during his/her testimony appeared arrogant and indignant for needing to explain his/her actions." Agent failed to "appreciate that with the priviledge of being a licensee comes the responibility to comply with regulations."

Agent was fined $750.00 and required to complete 4 hours of continuing education. Agents license was placed on probation for 6 months.

" APPRECIATE that with the PRIVILEDGE of being a LICENSEE, comes the RESPONSIBILTY to COMPLY with REGULATIONS."

I sometimes wondered if the listing agreements and/or contracts, amendments, etc have been received by my office, and have been filed in the proper place? I use to think agents could rely on office staff to handle all hand delivered, mailed, and faxed paperwork that I send in to the office. However, I quit doing that a while back. Faxes get lost, part time help works on the weekend, and things can be misplaced. I now mail with delivery confirmation. I send hard copies and a digital file that I save so I know when I emailed a pdf. I also send an email to the office asking for confirmation that they received all paperwork. ( Phone calls can be easily forgotten, and there is no way to prove that I called so and so at the office on x date, and she said she did receive the mail or fax or EMD check that I sent or dropped off 3 months ago.

Jeff Pearl / REALTOR

RE/MAX Distinctive / Lic in VA, MD, DC

(703) 727-4876

jeffpearlhomes.com

jeffpearlhomes@gmail.com

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Jeff Pearl

RE/MAX Distinctive / LIC in VA - Lovettsville, VA

Full Service Full Time Realtor

#1 Linda- True- careful and efficient care of every transaction is important.

#2 Hi Coral- That's good practice on your part. There were many stories in this issue on handling EMD checks.

#3 Bud and Beth- It is unreal. I agree the broker should have caught it from the start.

#4 Hi Jan- Yes, it does describe our duties as agents.

#5 Hi Lenn- I agree- you're correct on all points. This should have been noticed by agent and broker at the start.

#6 Michael- You are correct as well. I agree, the broker ( not the office staff) should have noticed check was missing and asked about it.

Dec 09, 2011 10:40 AM

Alan May

Jameson Sotheby's International Realty - Evanston, IL

Home is where the hearth is.

The lack of earnest money, on schedule, would prompt a letter to all involved, (buyer's agent, and sellers... any lawyers involved)... this is no small gaff.

And what.. then RETURNING the non-existent deposit, before making sure that it was there?? tsk, tsk, and also, tsk.

Dec 09, 2011 11:06 AM

Joy Daniels

Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

Hopefully a lesson was learned by the agent. Deposits are held in special accounts for a reason.a

Dec 09, 2011 12:09 PM

David Shamansky

US Mortgages - David Shamansky - Highlands Ranch, CO

Creative, Aggressive & 560 FICO - OK, Colorado Mtg

Crazy - I am shocked that a check would be cut when nothing was received? Do they not know how to balance an acct?

Dec 09, 2011 12:59 PM

Francine Viola

Coldwell Banker Evergreen Olympic Realty, Olympia WA - Olympia, WA

REALTOR®, In Tune with your Real Estate Needs

This is a good reminder that we all need to document everything we do. My broker always tells us to "paper the file," meaning document conversations, emails, receipts, etc. just for scenarios like this (however for years, I thought he was saying "pepper" the file and had no clue what he was talking about!).

Dec 09, 2011 02:08 PM

Brian Madigan

RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON

LL.B., Broker

Jeff,

Good advice, you really have to do everything yourself. Don't rely on part time staff hired by the broker to answer the phones. That's just foolhardy.

Brian

Dec 09, 2011 03:20 PM

Marti Steele Kilby, CRS

Steele Group Realty - La Mesa, CA

Broker/Owner, San Diego, CA

Just seems pretty sloppy. In CA I never take a check, only a photo copy to deliver with the offer. If accepted, it is up to the buyer to deposit within 3 day of escrow opening. I don't ever want to handle an EMD check.

Dec 09, 2011 04:57 PM

Jo Olson

HOMEFRONT Realty - Kettle Falls, WA

Retired - HOMEFRONT Realty @ LAKE Roosevelt

Nothing surprises me when it comes to agents and paperwork. I spent 3 year processing escrows in CA during the years of 2003-2006 - I saw some scary stuff!

Dec 09, 2011 06:21 PM

Rosalie Evans

Meritus Group Real Estate - Sioux Falls, SD

The Evans Group, Sioux Falls, SD Homes For Sale

I am extremely cautious with EMD because of all the problems that go along if you do it wrong! I also do not always trust that other people will get my work done for me! If it is not done it is my license that gets ranked while the hourly person is fine with their job! Must do due diligence!

Dec 09, 2011 07:32 PM

Fernando Herboso - Associate Broker MD, & VA

Maxus Realty Group of Samson Properties - Clarksburg, MD

301-246-0001 Serving Maryland, DC and Northern VA

I've seen this happen a few times already in a prior company.. .it could be an expensive lesson

Dec 09, 2011 09:56 PM

Gabe Sanders

Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL

Stuart Florida Real Estate

I don't think it matters what the office was supposed to do. If the agent that is supposed to be handling the deposit/earnest money is sending a copy of the check for proof of funds without actually having it, seems wrong to me.

Dec 09, 2011 11:42 PM

Charlie Dresen

The Group, Inc - Steamboat Springs, CO

Steamboat Springs, CO e-Pro

Follow up is key and I've learned to never "assume" anything has been taken care of - when it comes to the important stuff, I always double check and keep a paper/email trail. It seems very irresponsible that a check was cut for a deposit that was never made; that points to a serious breakdown in both checks & balances as well as pretty basic accounting. Lessons learned all around.

Dec 10, 2011 12:54 AM

Scott Godzyk

Godzyk Real Estate Services - Manchester, NH

One of the Manchester NH's area Leading Agents

It is definately up to the agent to look after and make sure their sale is completed. Collecting the EMD is a step in the process. That agent desrves the penalty if not harsher.

Dec 10, 2011 02:04 AM

Mary Sheridan

Keller Willliams - 1033 Hamilton Place,Johnson City TN 37604 - Johnson City, TN

Creative Marketing, Buyer Agency 423-943-7655

As always, Lenn's comments are thorough and useful. Others also, but always Lenn's.
I try to be careful about the details, but if I ever slip up, I know our faithful Suzy will catch anything. Every office should have someone like her. And she is endlessly patient and thoughtful.

Dec 10, 2011 02:54 AM

Frank Castaldini

Compass - San Francisco, CA

Realtor - Homes for Sale in San Francisco

Without that deposit money they were always technically out of contract. Both sides, buyer and seller agents should have been checking on funds deposits. EMD must be treated carefully and in compliance since that is one of the biggest areas of concern. Thanks for the story. Very thought provoking.

Dec 10, 2011 04:14 AM

Wayne Goss

Keller Williams - Punta Gorda, FL

THE MYSTERY MAN

Down here times have changed. Most brokerages don't even handle the money anymore unless they have to. Monies and deposits are sent to the title company. I am sure this evolved due to the problems which you described...Wayne

Dec 10, 2011 08:14 AM

Paula Bradfield

Bradfield Ramsey Group - Salida, CO

Your Salida Colorado area Realtor Team

We have just switched to money being turned into the title company as well...only because of the time it takes our secretary to process it in-house. But when she did, it was impeccable and nobody knew real esate law better than her.

Dec 10, 2011 09:27 AM

Jeff Pearl

RE/MAX Distinctive / LIC in VA - Lovettsville, VA

Full Service Full Time Realtor

#8 Alan- Yes, sems like this should be a rare mistake for an agent and broker to make. Tsk tsk is right. I'm guessing that maybe the broker of the agent that was fined might have been told that the listing broker was holding the EMD? It still should have been confirmed.

#9 deleted by poster

#10 Joy- Yes, I belive the agent did learn a lesson. ( ,aybe more than one).

#11 US Mortgages- I guess whre the broker went to return the check is when he discivered that they never receive or deposited it, which started this process.

#12 Francine- I agree- I make extra effort to document everything these days.

#13 Brian- You're correct. Don't assume someone else did something that your responsible for getting done.

#14 Marti- yes, a little sloppy. Most agents here get a EMD check from buyer when they write an offer, but don't turn it in to be deposited until contract is ratified.

#15 Jo- I'm sure you've seen plenty of scary stuff, and I'm sure other agents out there have made mistakes with checks and paperwork.

#16 Rosalie- That's how it should be. Can't trust others to do the work of an agent.

#17 Fernando- You're correct, I think the lesson could have been more expensive than it was.

#18 Gabe- I agree- something that serious should be on top of the agents mind.

#19 Charlie- You're correct, and it does sound like a serious breakdown. I would think the broker would have noticed from the start that there was no check with the ratified contract. Strange. But the agent should have stayed on top of it.

#20 Scott- yes, it's part of the agents job to properly handle and document teh EMD check.

#21 Mary, I agree with Lenn as well.How could the agent forget she never received the EMD check? How would her buyer client know that he was suppose to send the actual check to agents office? Very strange.

#22 Frank- Maye that's true since nothing else of value was mentioned, but they all thought they had a ratified contract. You're correct, the agents should have been more alert to details like a EMD check.

#23 Wayne- Most brokers here hold EMD checks, but occasionally a title company will hold it.

#24 Paula- Occasionally a buyer here will write in offer that EMD will be held by XY Title company, but mostlt brokers hold it in escrow accounts.

Dec 10, 2011 10:02 AM

Sonsie Conroy

I serve buyers and sellers everywhere in San Luis Obispo County - San Luis Obispo, CA

Energetic, Enthusiastic, Knowledgeable Realtor

As Marti said, in CA we agents are more hands-off. The escrow company is the entity that must receive, account for, and deposit/return all deposit checks. In fact, my firm doesn't even allow agents to HANDLE a check to make a copy to submit with the offer! We are supposed to lead the client to the copier and help him or her actually copy the check, take it back, and hand us the copy. I confess, I sometimes do not go to that extreme. :-)

Dec 10, 2011 10:15 AM

MeLisa Minter, Realtor

Minter Real Estate Services - Taylor Lake Village, TX

Bay Area Houston Real Estate Agent

It's crucial for each agent to handle their paperwork efficiently and to make sure office have copies. I also have an online network that I can keep files in the skydrive. It helps so much when we need to refer to files if we're not in the office.

Dec 10, 2011 01:05 PM