The purpose of a policy and procedures manual is to make sure that all members of the brokerage company understand the broker's philosophy. All company policies must comply with all laws, including license law. The law does not prescribe manual contents but does suggest several topics.
On the next few screens we'll list some of the items you may likely see in your company's policy and procedures manual and what kinds of information about those topics you will find.
-ADVERTISING - Who writes the ads? Who places ads? Who pays for ads? What media is authorized for use in the brokerage? Is there training on telemarketing solicitation?
-BROKER RESPONSIBILITIES - What are the broker's obligations to the staff and licensees? If the managing broker's license becomes inactive, what are his or her obligations to the licensees? What are the procedures for ending the sponsorship of a licensee?
-CODE OF ETHICS - What are the ethical standards
recognized in the brokerage? How are staff and brokers expected to adhere to these standards? If the licensees are REALTOR® members, must they have had the NAR Code of Ethics training?
-COMMISSION POLICY ON ASSOCIATE'S PERSONAL PURCHASES/SALES - Can the sales associate buy and sell properties for his or her own investment portfolio? Will such transactions need to be run through the brokerage? What is the responsibility of the broker in this situation and what is the liability of the broker?
Are personal investment opportunities allowed or not?
-CO-OPERATIVE SALES WITH OTHER REAL ESTATE COMPANIES - If the brokerages are members of a Multiple Listing Service, usually cooperating brokerage fees are spelled out in the MLS rules. But if not, those policies will be addressed here. Also the policy in dealing with out-of-state brokerages should be defined.
-DESK SPACE - Are desks and/or cubicles to be shared? Are computers to be shared? What are the procedures to be followed in
creating a compatible sharing situation?
-DISCRIMINATORY PRACTICES - Licensees and staff should understand that they must not inquire about, respond to or facilitate inquiries about, or make any disclosures which indicate any preference, limitation or discrimination based on race, color, religion, sex, national origin, ancestry, familial status, or handicap. Handicap includes a person who has, had, or may have, AIDS, or an HIV infection or illness.
-DRESS AND ATTIRE - Is attire in the
office to be professional at all times or is casual attire permitted? What constitutes professional attire? Is professional attire required at all times when brokers are with clients?
-ENTERTAINING CUSTOMERS AND CLIENTS - Are there specific policies regarding how customers and/or clients should be entertained? Even if the licensee is paying, are there limitations on where a customer/client can be taken; i.e., a nightclub, a sports bar, etc.
-ESCROW MONIES - What are the requirements for
getting escrow monies to either the brokerage or the approved escrow depository (Title Company)? What forms of escrow monies does the brokerage allow; i.e., personal check, cashier's check, money market order, promissory note, etc.?
-FLOOR TIME - What is the purpose of floor time, how is it to be scheduled, how long is it for? Can the independent contractor request floor time? What are the other specific rules expected of the salesperson during floor time? Does each brokerage listing require
special informational training?
-INTER-OFFICE RESPONSIBILITIES AND COOPERATION - What responsibilities does each person in the office have to the other? What are the telephone procedures? When there are inter-office disputes, what is the procedure? Who makes the final decision on inter-office disputes? If someone feels there has been sexual harassment, to whom is that reported? What are the consequences for continued violations of the office rules?
-KEYS - What procedures are in place for
keeping keys safe in the office? What steps must staff and brokers follow in the distribution of keys and in getting them back?
-LISTINGS - WHAT IS EXPECTED - What are the types of listings taken within the brokerage (exclusive-right-to-sell, exclusive, open, other)? Does the firm accept third-party corporate relocation listings? How should listings be priced and what is the policy for how long a listing should be taken?
-LISTING POLICIES AND PROCEDURES - What is the procedure for bringing
the listing into the office? How is a listing entered into the MLS? What contracts or forms are to be used, how is the listing information to be verified, and what are the processing procedures? Is a home protection plan offered? How will the listing be serviced by the listing agent and the brokerage? What is the brokerage responsibility to the listing licensee regarding advertising, other marketing, etc.?
-OFFERS AND COUNTEROFFERS - Is it the policy within this brokerage for the agents to
present their own offers directly to the sellers, or is it standard to fax or email the offer to the other listing brokerage and let the listing agent present the offer?
-OPEN HOUSES - What are the procedures for licensees holding open houses? What are the rules regarding open house signs and directional signs? What are the safety policies regarding how to keep the licensees safe and how to protect the homeowners' possessions during an open house?
-PROSPECTING POLICIES AND PROCEDURES -
What types of prospecting for clients are encouraged within the brokerage and what types are discouraged? What are the policies regarding general advertising; direct-mail, fliers; signs, flags and billboards; individual advertising programs; telephone solicitation and prospecting programs; expired listing prospecting; door-to-door neighborhood canvassing (farming), long distance telephone calls.
-REFERRAL FEES -How are referrals dealt with?
-SAFETY POLICY - What is the established
procedure for maintaining safety in the office place? What are the codes and procedures for keeping agents safe who are in the field?
-SALES CONTRACTS - WHAT IS EXPECTED - What are the procedures in place when a sale is made? How is the sale to be brought into the office? What are the procedures for: acceptance and ratification of offers, the deposit of earnest monies, holding of the documents, occupancy agreements, non-realty items, contingencies, alterations and changes, inspection of the
property, procedures on forfeitures and returned deposits? Who maintains the transaction folders and the trust account?
-SALES MEETINGS AND INSPECTION TOURS - What is the policy on sales meetings? When, where and how often are they to be held? Is attendance mandatory?
-SALESPERSON COMMISSION POLICY - Even though the specific commission split with each individual agent is outlined in his or her Business Agreement, the office policy manual will explain the commission procedure for the
brokerage.
-SALESPERSON EXPENSES - What is the salesperson expected to pay for (signs, business cards, entertaining, and advertising)?
-SALESPERSON DISPUTES - When two licensees get in a dispute over clients, commissions or general problems, what are the rules for mediation or binding arbitration (within the company)? Will there be money considerations (fines, etc.?) What could be the potential disciplinary actions?
-SETTLEMENT AND SETTLEMENT COSTS - Are there brokerage-directed forms
to use with the sellers and buyers to ease them through the escrow process? Does the broker use the lender's Loan Estimate form or does the broker determine the figures?
-SHOWING PROPERTY - Are there specific procedures for the brokers to use when showing property? What is the policy for making appointments, keeping appointments, and breaking appointments (if necessary)? How can the broker be safe, and how can the broker protect the homeowner's possessions while showing the
property?
-TELEPHONE/TELEGRAM/FAX /EMAIL ACCEPTANCE OF A CONTRACT - What is the policy for accepting a contract via phone, telegram, fax or email?
-TERMINATION - What are the actions that will precipitate termination with the company? What will happen to transactions that are in escrow?
-USE OF COMPANY RESOURCES - Besides using office space, desks, computers, telephones, office supplies, use of a receptionist and/or secretary, what other office resources are included? Does the broker
pay for copies? What costs can a licensee or staff employee expect to pay?
Note: It is important for the policies and Procedures Manual to have all the answers to every brokerage procedure question.