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2010-04-08 15:50:22

Compliance And The Virtual Culture


I wrote this original article last year. Since then we have started doing daily Compliance webinars. We only allow two words in our corporate office. Those words are Compliance and Recruiting. If you don’t have strong skills with these two subjects, nothing else matters because you will shrink till you go out of business or you will be closed down. So I’m going to elaborate a little more on the compliance issue.
In an ongoing series of articles, I would like to take the opportunity to keep the Real Estate Industry up to date with behind the scene issues regarding operating a NATIONAL INTERNET-BASED REAL ESTATE BROKERAGE.
Last month we discussed the type of Realtors who are attracted to and are joining the VIRTUAL CULTURE.  As we shared with readers last month, the type of Realtors who are joining the VIRTUAL CULTURE tend to be younger than average with approximately 8 years in the Real Estate Industry. They are independent and they also seem to be more detailed and professional.
This month we will discuss COMPLIANCE. This seems to be the biggest single issue, that we hear whenever we interview new state or regional Brokers. They ask, “How do we handle compliance?”  We also hear it from the Brokers who are still married, even if they are unhappily married, to the Brick and Mortar business model.
I will share a lot with the reader, but I will also hold back some of our trade secrets, since we still seem to be the only TRUE NATIONAL INTERNET-BASED REAL ESTATE BROKERAGE in the country.
I truly believe that not only can we equal the very best run Brick and Mortar companies in the nation when it comes to COMPLIANCE, but my goal is to become the best there is, with regard to COMPLIANCE.
Since I first wrote this article we have spend 10’s of thousands of dollars to build our own proprietary back office system that makes sure we are compliant in every state and municipality.
Compliance is more than just a single act. Compliance breaks down into several sub categories. Those categories consist of
1)     Making sure that we treat escrow/trust monies correctly. We only have escrow/trust accounts in states that require the Broker to have an escrow/trust account. In other states like California even when you don’t have to have an escrow/trust account you still must maintain a Trust log. We take great pride in making sure we are the picture of compliance.
2)     Compliance also consists of getting all the paperwork/contracts to the Broker on a timely basis. Different states have different requirements. We are called bully at times for demanding all our Realtors abide by all the state regulations in this regard. We have a zero tolerance policy towards compliance. A single violation is cause for termination.
3)     Compliance consists of the collection of all documents. Listing Agreements, Sales contracts, closing documents and even all documents written where a sale did not result.
4)     Compliance consist of maintaining all these document for the require stator time by the different states and municipalities.
Our Realtors scan and then download all their documents into our back office system. Each one of our Brokers gives us a list of every possible document that may be required in their area of operations. Maybe in the same area you have an airport noise disclosure or a shale disclosure or a radon gas disclosure.
We then set up the system for that Broker. When a Realtor scans in their paperwork they must check each box stating rather a particular document is included or not required.
Once the Realtor does this. The system flags the Broker and our internal staff that paperwork has been submitted and the following documents are still required or missing.
In our case we have 3 sets of eyes reviewing all documents, The Broker, the Realtor and our internal staff. We hire an administration person for every 200 Realtors. That person must have a Real Estate background, and they also review each document.
Prior to issuing a Commission Disbursement Order so that the Realtor can be paid at the closing table. The Broker must sign off stating that all documents required are in the system and are correct, i.e. HUD statements, etc. 
First, let me say that every week, we address compliance issues with our State and Regional Brokers as well as all our Realtors. We also require our State and Regional Brokers to monthly update us on all National, State and Local laws, rules and regulations that have an effect on our compliance performance.
We work very closely with our Realtors to make sure not only do they get their contracts into us, but also all their listings, plus all the contracts that they may write that were rejected. We essentially are, our Realtors Transaction Coordinator, Secretary and Compliance Officer. By working with our Realtors closely and by being extremely diligent in maintaining their files, we are there for our Realtors should an issue ever arise concerning a contract that they were involved in. Our Realtors can count on us to have everything they need to answer any complaint.
We also make it very easy for our Realtors to get all documentation to us, by just scanning and sending all documentation to the corporate office. Our software allows us to store, categorize, and make available all files to our Realtors and Brokers for a period of 5 years.
We believe that we as a company must put the good of the public before all else.
James A. Crumbaugh III is CEO of Allison James Estates and Homes and may be reached at
Check out the Allison James Estates and Homes Group on RealTown.


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