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Brokerage Fundamentals Pitfalls and Protection Recap

13 minPRO
6/6

Key Takeaways

  • Trust account protection is paramount: verify deposits, minimize exposure, and prefer title company escrow over brokerage trust accounts.
  • Contract traps (protection periods, exclusive terms, hidden fees) are avoidable with attorney review and proactive negotiation.
  • Brokerage insolvency contingency planning includes independent records, minimal trust exposure, and state recovery fund knowledge.
  • The post-NAR settlement landscape requires explicit buyer agent compensation negotiation in every transaction.
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Test Your Knowledge

1.What is the maximum recommended protection period (tail clause) in a listing agreement?

2.What should an investor do when receiving wire instructions by email for a real estate closing?

3.Under RESPA Section 8, what is prohibited in connection with federally related mortgage loan transactions?