Tag Archives: real estate questions

When do I have to turn in the earnest money deposit?

QuestionAround the holiday season more than any other time of the year I find I am frequently asked when agents need to turn in their clients’ earnest money deposit checks (also referred to as escrow deposits). The answer is the same as it is any other day of the year – as soon as possible!

18 VAC 135-20-180, B., 1., a. of the Real Estate Board Regulations stated that for purchase transactions “Upon the ratification of a contract, earnest money deposits and down payments received by the principal broker or supervising broker or his associates must be placed in an escrow account by the end of the fifth business banking day following ratification, unless otherwise agreed to in writing, and shall remain in that account until the transaction has been consummated or terminated.”

Keep in mind, however, that just because the Virginia Real Estate Board (VREB) states we have five days from ratification to deposit the check, an agent’s brokerage company still needs to process the transaction before depositing the check. Agents, do you brokers and your office support a favor this holiday season and turn in your EMD as soon as you get ratified!

Choose Your Broker Wisely

In my day to day encounters with real estate agents and the public alike I have people frequently ask me what makes Prudential PenFed Realty different. New agents oftentimes ask why they should work with a company with a commission structure such as ours when other companies offer 100% commission splits for a small monthly and per transaction fee. One thing that many people simply do not put a high enough value on is having a broker that has solid industry experience. So many times I see cases brought before the board that really could be avoided if the agent simply had some strong guideance.  Each time I see one of these cases I keep remembering this article written by Florence Daniels, a long time leader in the real estate community, entitled Choose Your Broker Wisely.

After a recent incident where an agent I know personally could have landed in a bunch of trouble I went and dug up an old copy of the VAR newsletter to keep handy.  Florence says it so much better than I can.  I hope you enjoy the read.

This article is not written to bash brokers but to give a wake-up call to salespersons that remain with brokers who fail to provide adequate training and supervision. Although this article is directed primarily to new salespersons, it will also benefit experienced salespersons.

The Board has considered a number of recent disciplinary cases involving salespersons who violated one or more of the Board’s laws and regulations. In many of these cases, the salespersons claimed that the violation(s) occurred because their brokers did not train them properly or prepare them for the unique set of circumstances that led to the disciplinary action.

This claim carries little weight with the Board. All salespersons are responsible for choosing a broker who will help them avoid risky decisions that could lead to disciplinary action or harmful civil consequences.

During the past five years the real estate profession has witnessed a proliferation of real estate business models which provide different levels of services. No longer is the traditional brokerage firm offering “full service” real estate services the only game in town. Many non-traditional firms now offer “limited” real estate services. Salespersons now have the choice of working with a traditional or non-traditional firm.

Unfortunately, many new salespersons choose the glittering prospect of fast money over building a solid clientele through rigorous training, hard work and sound business practices. Salespersons whose top priority is more compensation or a higher split often fail to seek a broker and firm that would provide the requisite training to enable them to become competent well-rounded real estate professionals.

There are a number of important reasons for a salesperson to choose a broker who values training and supervision. First, new salespersons are generally inexperienced and subject to numerous potential traps associated with the complexity of the real estate business. Rigorous and effective hands-on training can help new salespersons avoid these traps and help them develop into competent real estate professionals. Many firms have their own real estate schools or mentoring programs to accomplish this.

If these options are unavailable, new salespersons still must select a broker who will help them understand complex real estate transaction documents, office policy, how to handle the money or deposits of others, real estate laws and regulations, agency and limited service agency, fair housing laws, how to conduct a listing appointment, and the multitude of principles, practices and nuances involved in real estate.

New salespersons should not expect to learn all this on their own – there is just too much to learn. A broker should be there to train and guide the salesperson, and the salesperson must expect this from their broker. After all, the broker will usually share in any compensation that is generated from the salesperson’s efforts.

As licensees, we should all strive to update our knowledge. And as we continue to learn, our businesses will grow. And most important, we will serve our client base well and reap the referrals for such exceptional service and knowledge.

I love real estate

I love real estate… ask anyone and they will tell you. Once I start talking about it, I cannot seem to stop.

Over time it seems I have answered some questions so many times that it only seemed logical to write it all down some place in case someone out there on the Internet stumbled across my little blog.

Is now a good time to buy?
Should I sell now or rent my house out until the market bounces back?
What is an escalation addendum?
Do you know where I can find a short-term rental?

Give me some time and you will find the answer to these questions and more on this little blog.

Have a question? Feel free to ask, I will give an unbiased answer!