February 16, 2012


Good Afternoon Everyone-

Welcome to another day in the fascinating and exciting world of real estate!  IT HAS BEEN VERY SLOW IN THE LEGAL ISSUES AREA THIS PAST WEEK.    It must be that everyone is working, prospecting and closing transactions...great job!

In light of this fact, I had to search for three questions to present to you this afternoon which would be pertinent and relevant. Feel free to open discussions with your office manager on any of these questions.  Often, their insight into the question reveals even more questions and answers. Enjoy!

Question 1:

I’m an agent in the Rockford office, and have heard that other brokers are giving their salespersons permission to sign closing statements on their behalf. I have always understood that closing statements must be signed only by a broker or associate broker. Am I correct?

Answer:

YES. Rule 311 states that “the broker or associate broker who is involved at the closing of a real estate transaction shall furnish, or cause to be furnished, to the buyer and seller, a complete and detailed closing statement signed by the broker or associate broker showing each party all receipts and disbursements affecting that party.” An associate broker may not delegate this responsibility to a salesperson, however, in the past, the Department has allowed an associate broker to review and sign a closing statement prior to closing.

Note the words “complete” and “detailed” closing statement.  The State wants ALL MONIES that move, as part of the transaction, noted on the HUD statement.  No funds outside of the HUD statement.

Question 2:

Hello Jim, I have moved to the next level and have hired an unlicensed assistant. I am having my assistant make cold calls to prospective sellers. I have made sure that my assistant has verified that these prospective sellers are not on the Do Not Call List. Can my assistant make these calls?

Answer:

NO - An individual must be licensed in order to make cold calls to prospective clients. Be very careful -even when the unlicensed assistant makes warm / hot calls to a client or past client, they are still very limited in what they can legally do.

Question 3: 

I am a broker who represents a buyer. My buyer made an offer on a property that was accepted by the seller. Both the buyer and the seller have agreed in the contract that I am to hold the earnest money check in my office and not deposit it in our trust account until the inspection period has passed. Would this be allowable under Michigan law?

Answer:

NO - The Occupational Code provides: A real estate broker shall deposit, within 2 banking days after the broker has received notice that an offer to purchase has been accepted by all parties, money belonging to others made payable to the real estate broker in a separate custodial trust or escrow account maintained by the real estate broker with a bank, savings and loan association, credit union, or recognized depository until the transaction involved is consummated or terminated, at which time the real estate broker shall account for the full amount received. MCL 339.2512(j) (iv). An agreement to the contrary by the buyer on the seller does not relieve the broker from his duty to deposit money in his/her possession within the prescribed time set by the code. If the buyer and seller want to make such an agreement, then they should also agree to have someone other than area estate licensee hold the funds.  Another possible solution - the parties agree, in writing in the PA, that the EM Deposit is not to be collected until after the inspections are complete. Again… be careful with this.

Three questions and three responses…best practices in practice by the finest agents on the planet Earth.

I love your comments so keep them coming! Watch for next week’s edition and until then… go sell something!

Sincerely-

Jim Fase