Chapter 3 Managing Broker-15hr

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Chapter 3 Handling The Money:

Chapter 3 Handling The Money Managing Broker Program - 45 Hrs Managing Broker Pre-Licensing Course – 30 Hrs

Slide2:

Introduction Handling and managing Escrow Funds is another major responsibility of the sponsoring /managing broker. The Real Estate License act has all of the information. Illinois License Act 2000 ( The “ACT”) http://idfpr.com/ Page 49 #1 Disciplinary Violation of the Act by Illinois Managing Brokers

Escrow Funds:

Escrow Funds Monies, promissory notes, security deposits held by the broker for the benefit of the parties to the real estate transaction. (i.e . Property Owners can hold their own Security Deposits and not be meet the requirements of ACT ) With out written agreement stating other wise other funds can be consider escrow funds ( i.e. rent) Page 50 Definition

Escrow :

Escrow Don’t Have to unless you except funds of other FDIC Insured Accounts Only Sponsoring/Managing Brokers Can have an account Consent o Examine Form #3 on Form Signatories Non Interest Bearing Interest Bearing only with written permission of the parties and who gets interest. Page 50 Escrow Account Form ( Fig 3.1) Records Kept for 5 years ( 2 of the last 3 on Site)

Escrow :

Escrow Comingling Brokers (mixes broker personal or business $$ in Escrow Account Conversion (Broker take it out and spend it account) Exception (Broker puts his money in to “maintain” the account). © 2011 by Kaplan, Inc. Page 50 Commingling and Conversion Maintain a Minimum Balance or for More Checks Number #1 Cause for Disciplinary action by IDFPR

Escrow :

Escrow Send to Main Office Can not put in another Branch office Account . Page 50 Branch Office Escrow Next Business Day and keep a record Number #1 Cause for Disciplinary action by IDFPR

Escrow :

Escrow Seller Extra Quiz: To Whom Does the Earnest Money Belong? ANSWER: None of the above. The Earnest Money Belongs to the Contract . Buyer Broker

Escrow :

Escrow Deposit the Next Business Day of “Transaction ” Disbursement According to the Contract or earlier than the day its consummated (closing) or later than the day after a receipt to disburse). Page 52 Time of Deposit and Disbursement Short sales and Foreclosures after the “Transaction” is after the lender approves price Receipt: Signed by both parties or duly authorized agents Unless authorized can’t take you commission out Foreclosure sales require Lender signature ( short sales do not )

Escrow :

Escrow Hold until Both parties agree in writing Hold until a court orders) Transfer to State Treasurer Broker files an “Interpleader” Page 54 Disbursement Dispute Advise: Consult with office legal counsel before you disburse

Escrow Funds:

Escrow Funds Summary of Escrow Account Rules Page 55

Escrow Records:

Escrow Records Journal (page 58) Ledger Card (page 59) Monthly Reconciliation (p 61) Master Account Logo (page 63) © 2011 by Kaplan, Inc. Page 56-57 Next “business day "after contract acceptance

Slide12:

1. Can only pay their licensees ( managing brokers, brokers, leasing agents, licensed sales assistants) 2. Unlicensed Assistants can be paid by Sponsoring broker or the licensee they are working under Compensation Page 57-63 3. Other Sponsoring Brokers ( i.e. in co op offices) Sponsoring Brokers 4. A licensees “corporation” ( only to receive c ompensation) Must be “disclosed to Client in Writing)

Slide13:

1. Clients must be told in writing of commission source and/or splits) Disclosure of referrals to entities where broker has greater than 1 % interest Any referral fee Relationship (ABA Fig 3.9) Page 64 3. Can offer “compensation” to un licensed parties of the transaction Compensation Disclosures

Chapter 3 Handling the Money Review Quiz:

Chapter 3 Handling the Money Review Quiz 14

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