Every licensed broker must have and maintain an office accessible to the general public. The broker must meet the following regulation requirements:
Resident Records - Brokers who do not reside in Washington must keep their Washington records and client trust accounts in Washington with a Washington licensed broker, escrow agent, attorney, or title company.
Records 3 years - Brokers are required to keep real estate transaction records for three years. They are to keep at least copies of earnest money contracts, listings, receipts, and disbursements of all closed real estate transactions of their brokerage.
Office Zoning - A broker's office must comply with zoning regulations and any business ordinances even if their office is located in their residence.
Separate Records - A brokerage firm may be located in an office where the broker conducts a separate, compatible business, such as a construction, land development, or other type business. The real estate business activities and real estate brokerage records must be maintained separately and apart from the other personal or business records.
Common Facilities - Two or more brokerage firms may conduct real estate business at one location with a common entrance and address. A real estate brokerage office must be identified by a sign at the office entrance that is visible to public. Each firm must be physically separated. Each brokerage must maintain their separate accounts and required real estate records separate from each other.
Separated From Living Quarters - A real estate office may be in a broker's home if the office is separate from the living quarters. There must be a sign at the office entrance visible to public and the entrance may not be through the living quarters. Local city zoning must allow in-home business and there must be an address that can be located. Out-of-state brokers may not have an in-home office; they must maintain an in State office.
Signage - A sign that shows the name of the brokerage firm must be visible to the public. The name must be the same as the name on the license. The brokerage must be located at the address as shown on the real estate brokerage license. The name of the individual designated broker in charge is not required.
Display License - All real estate licenses must be available in the office at the address on the license and the licensee must work out of that location.
No Misleading Name - A brokerage name cannot be misleading or similar enough to another brokerage firm to be misleading to the general public.
Branch Offices - Branch offices have specific requirements as well:
Files And Records
DOL Rules - The DOL and Real Estate Department have specific rules regarding documentation. The following procedures apply:
Listing Agreements - All listing agreements must be in writing according to the Statute of Fraud in Washington.
P/S Agreements - All Purchase and Sale agreements must be in a written form. They must show the amount and the form of earnest money deposit.
Non-Cash Disclosure - The failure of a salesperson to advise a seller that the deposit is other than cash or its equivalent is a violation of license law.
Trust Account - Brokers must deposit all funds into their firm-s trust bank account the next banking day following receipt of the funds unless the purchase and sale agreement provides for deferred deposit or delivery. In that event, the broker must promptly deposit or deliver funds in accordance with the terms of the purchase and sale agreement.
Check Can Be Held - A check may be held for a specified time if the buyer requests it in writing on the purchase and sale agreement. Don't forget, the seller must agree with this procedure by signing an acceptance of the written request. Cash can never be held. The cash must be deposited by the end of the first banking day after it is received.
Demand Notes - Promissory notes used for earnest money should be "demand notes," payable upon acceptance of the offer or payable on a specified date. The broker is responsible to demand payment when the promissory note becomes due. The broker is required to inform the seller if payment is not made as agreed. Failure to inform the seller could lead to a lawsuit, suspension, or revocation of the broker's license.
Separate Transaction Folders - Transaction files are to be in their own individual folders and filed in a systematic sequence. Each transaction folder should include all agreements, contracts, documents, leases, closing statements, and any correspondence regarding the transaction.
Trust Account(s) - A brokerage firm must have a separated trust account from its business account. When starting a trust account, it will have a zero balance. Each time earnest money is taken on behalf of buyer/client; it must be placed in this trust account or sent direct to the client's escrow company.
Bank Notification - The chosen bank for the trust account must be informed of the "trust funds" nature of the account. The real estate division must be notified of the location of the trust account.
No Account Fees - No bank account fees are to come out of the trust account. Any involved fees should be taken from the firm's business account.
Monthly Reconciliation - The broker is required to reconcile (balance) all trust account statements monthly and to retain in sequential order all canceled checks of those trust accounts.
Business Accounts - NO Reconciliation - The business account of the firm is not subject to State regulations. This is the general business account of the firm. This is the account that pays your commission, salaries of office staff, and the bills of the firm.
Trust Account - Reconciliation Monthly - Only client moneys go into this account. No commissions, salaries, or bills can be paid out of this account. The client moneys that go in must be paid back to the client or forwarded on to escrow for closing.
Records Available for Inspection - All of the real estate broker records must be kept for three years and be available for inspection and audit by the Director or their representatives. Most wise brokers keep their records for more than the required three years.
A Washington brokerage office could be located:
A) at an undisclosed residence
B) at a post office box
C) at an office building where several different brokers have an office as long as each firm is physically separated and has a sign marking their office entrance
D) any of the above
Which of the following statements is false concerning a brokerage office?
A) non-resident brokers may have an office in Washington
B) a designated broker may have their office in the home's living room
C) a broker's office must comply with zoning rules and building ordinances
D) a broker's office must be accessible to the public and marked by a sign
Which of the following is a false statement concerning a branch office?
A) a branch office may be managed by a salesperson
B) there is no limit to the number of branch offices a broker can have in Washington
C) a branch office is not required to keep regular business hours, office staff, or even a telephone
D) Broker Smith sells homes at a subdivision 5 miles away from his main office. He spends most sunny afternoons at an Open House in the model home. This situation does not require a Branch Office license
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