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In a real estate brokerage, brokers have a myriad of responsibilities. These include the oversight of transactions, office operations, hiring and training agents, and a number of other crucial functions. In order to ensure a brokerage is complying with local, state, and federal laws, brokers must provide themselves and their agents with the tools needed to do their job effectively and within the bounds of legal compliance.  Specifically, brokers need effective process and procedure documentation to keep track of what must be done to perform their duties without violating laws. Before going any further, however, we should explain in more detail what exactly brokerage and process and procedure documentation are.

What is Brokerage?

Brokerage is the work of connecting buyers and sellers to one another for transactions of bonds, stock shares, investments, insurance, and other kinds of financial options.  Brokers facilitate this process by acting as middlemen between the buyers and sellers.  Brokerage plays an important role in many industries, as it allows businesses to connect and conduct exchanges with clients and customers.  Among the industries that brokerage plays a prominent role in is real estate, which makes frequent use of the kind of transactions brokerage facilitates.  Now that we have explained what brokerage involves, let’s discuss process and procedure documentation, and their importance to brokerage.

What is Process and Procedure Documentation?

Process and procedure documentation is a type of documentation used to record all of the stages of a process or procedure.  Such documentation describes the steps and resources required to complete a process in detail, as well as instructions for how to perform those steps, allowing workers to refer back to said documents for guidance when performing the task or process in question.  Process and procedure documentation also helps in teaching new workers how to perform their responsibilities, as such documents act as a source of training and instructions that can be mass-produced and given to new employees if a more experienced worker is not available to train them.

Why is Process and Procedure Documentation Important in Real Estate?

Comprehensive process and procedure documentation are paramount to the smooth running of a real estate brokerage. This documentation lays out the processes and procedures a real estate brokerage must abide by to ensure it is not violating any laws and that the brokerage has a uniform structure to follow to eliminate any confusion. Having real estate brokers and agents that know what they are doing every step of the way not only helps a brokerage avoid liability but also builds a strong reputation amongst clients.

How Should I Navigate Real Estate Laws?

Real estate laws can be quite tricky to navigate as there are federal, state, and local laws that a brokerage must take into account. For instance, the Fair Housing Act of 1968 is a federally imposed law that bans discrimination on the sale, rental, and financing of housing based on race, religion, national origin, or sex.  However, there may also be additions to this law depending on the state or even city. Thus, it is important that a brokerage stay up-to-date on real estate laws on the federal, state, and local levels in order to ensure that they are able to effectively work through the brokerage system.

It goes without saying that brokers must also make their employees aware of these laws as well. A streamlined way of doing so is by making sure that your process and procedure documentation are in line with current laws so your agents have a great resource to refer to. However, given that real estate brokerage must abide by federal, local, and state laws, it can be time-consuming to keep up written procedural documentation. In this regard, a technical writer can be the most efficient asset for a broker as they have the technical knowledge and skills to write up comprehensive and easy-to-follow process and procedure documentation.

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Developing Procedure Documentation in Real Estate 

A real estate brokerage’s written process and procedure documentation helps to standardize the tasks required of the brokerage’s employees. This reduces the chance of operational mistakes, some of which can have legal consequences. Thorough documentation should include sections on the following:

Each of the above sections contains information that is vital to ensuring that real estate brokerage is performed both effectively and in accordance with the law.

Written office policies provide the agents and other employees of the brokerage with guidance as to how to carry out their expected duties. Outlining the delegation of duties, meanwhile, helps to establish what tasks fall to which workers. This is critical as some tasks can only be done by the broker. Written documentation of regulatory compliance is also fundamental, as it provides agents and brokers with knowledge of laws that apply to the brokerage. These include fair housing laws, antitrust laws, and any relevant state and local real estate laws. Written documentation of these important topics allows for real estate agents, under leadership from the broker, to establish successful relationships with their clients and follow real estate law.

Real Estate Process and Procedure Documentation Template

A process and procedure document for real estate should at least generally follow the following description, although certain sections could be placed in a different order and additional sections and information may be included if necessary for a particular case.

The document should start with a description of the particular real estate brokerage process being conducted, as well as the relevant written office policies.  It should then explain the various local, state, and federal laws that must be complied with when conducting real estate brokerage.  Next, the document should describe the delegation of duties and code of professional conduct.  This section should be followed by the records management requirements, and an explanation of the organization and administrative procedures used in real estate brokerage.  The document could also include ideas or strategies for brokers to comply with relevant laws while facilitating real estate transactions.

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Common (and Avoidable) Violations of Real Estate Law

Written documentation provides immense help to brokers and their agents. It is important that they can refer to this documentation to ensure that they are within legal bounds when doing their work. Common but avoidable violations of real estate law include failure to appropriately maintain trust fund records, unlicensed activity, and failure to supervise brokerage processes.

Trust Fund Record Keeping Failure

In California, a common violation of real estate laws occurs in trust fund record keeping. In this instance, brokers often unwittingly commit trust fund violations because they lack the knowledge to properly maintain adequate records. The information needed to do their record-keeping properly must be included in procedural documentation. Having such information helps avoid violations associated with trust fund laws. California’s Department of Real Estate has even noted that a simple remedy would be the maintenance of proper office procedures.

Unlicensed Activity

Unlicensed activity, meanwhile, consists of paying someone who is not licensed or employed by a real estate broker during a transaction.  Process and procedure documentation is needed both to keep track of who is licensed to perform such transactions and who needs to be paid for the work.

Failure to Supervise

Violations based on a failure to supervise occur when a real estate broker does not properly supervise the transactions or other actions of real estate salesmen.  This can result in transactions being improperly conducted or important information not being recorded, both of which can in turn cause further problems for a broker or business.

Consequences of Real Estate Law Violation

Negligence in observing and complying with real estate laws can incur hefty consequences, including disciplinary action taken against a broker’s license.  In some states, such as New York, other possible consequences for violations include fines, lawsuits, disruptions to business, and general damage to a broker or brokerage’s reputation. Seeking the assistance of a technical writer can help standardize office processes and procedural documentation and help you avoid common violations of real estate laws. 

So, what now? How can you fix these problems?

How to Avoid Common Violations of Real Estate Law

Real estate brokers can use a number of methods to avoid committing violations of real estate law.  One of the main ways to do so is by using and consulting process and procedure documentation, which – as previously mentioned – can provide brokers and their agents with the information needed to ensure that they are doing their jobs properly and to know what actions would violate real estate laws.  Another way to avoid law violations is by consulting another real estate broker or agent for clarification and advice, if possible.

In many cases, however, the methods for avoiding real estate law violations vary depending on the specific violation.  For instance, violations based on a failure to supervise can be avoided by ensuring that there is always a licensed broker or agent overseeing any transaction or other brokerage process.  A business or broker should make a point to assign someone with the required license to conduct a transaction if they are not able to oversee the process themselves.  Meanwhile, a broker or business can prevent violations based on unlicensed activity by keeping track of which employees or agents are assigned to oversee transactions and making sure that those who are have a license to do so.

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How EDC Can Help You

Without proper documentation of processes and procedures in a real estate brokerage, agent-client relationships can get strained. This is particularly true if the agent does not have proper resources on how to carry out their job. If an agent does not appear knowledgeable, this can reflect quite poorly on the real estate brokerage. Worse, it can also lead to a bad reputation among clients. Additionally, inadequate resources can lead to unintentional violations of real estate laws which can put a broker’s license in jeopardy.

Thus, it is essential that a broker ensures that the whole company has the knowledge to remain within legal bounds. Additionally, this is critical to keeping clients happy. This requires proper written documentation so that a broker and agents have the tools they need to refer back to. EDC’s technical writers have decades of experience working with a variety of clients in software companies, financial institutions, and even real estate agencies. Our technical writers can help produce in-depth, well-researched documentation. Thus, we help brokers and agents stay on top of legal compliance and maintain an organized operation. 

Whether you need a team of consultants to produce a complete line of documentation or a single technical writer for a brief project, Essential Data’s Engagement Manager will lead the project from start to finish. We guarantee the quality of our work at Essential Data Corporation. Contact us today to get started. (800) 221-0093 or

Written by Diana Guerra