Posted by Susan Johnson on 8/18/07 8:02pm
Msg #206441

Conflict?

I am a full time Real Estate Agent in TN and also conduct signings. I have been doing this for over a year. Recently, the Broker at my Real Estate office called me to say he had just heard about me doing signings and feels this is a conflict of interest. He also said I may lose my Real Estate license if I continue to conduct signings. Does anyone know the rules in TN regarding this issue? Thank you in advance for any input that you might can give me.

Reply by Loretta Reed on 8/18/07 8:25pm
Msg #206443

I can't wait til you find out what the answer is. I know plenty of loan officers that do closings for other lenders. I also know real estate agents in Maryland that do closings on loans as long as the loan is not on a home that they sold as the real estate agent. I see nothing wrong with it.

Reply by Stamper_WI on 8/18/07 8:41pm
Msg #206444

Agents and brokers in WI close loans. Bottom line, your fees for a loan signing are not contingent on whether the loan funds. A realtor has an interest if the home puchase closes because they don't get paid if it doesn't. He is thinking you have a financial interest in the outcome of the loan when you don't. There is the difference. My Opinion.

Reply by Charles_Ca on 8/18/07 9:01pm
Msg #206448

Its not my State so the laws are most certainly different but I fail to see the conflict, in California the lack of conflict is codified. The problem that I would see in California and your State may vary but the broker is the one who owns the contracts (listing and sales) as a sales associate you are only allowed to take the actions that the broker allows. If the broker specifically prohibits your notary activity on his contracts then you are running the risk of being terminated by that broker, another broker may see it differently. Of course if you are a co-broker then you have your own contracts and you can do as you wish with them, at least that is the way it works in CA, YMMV!

Reply by MikeC/NY on 8/18/07 9:46pm
Msg #206450

I doubt that the state has rules that address this specific problem, but your broker might... It's not a conflict of interest if you have no beneficial interest in the outcome of the transaction - I think that's pretty much a requirement for notaries in all states.

I don't know how it works in TN, but here in NY your real estate license is useless unless you have a broker to sponsor you - so his threat about losing your RE license may have something to do with that (IOW, he'll drop his sponsorship if you don't stop doing signings).

My suggestion would be to sit down with the broker and have a heart-to-heart. Let him explain why he thinks that what you're doing is a problem for him - listen to his objections - and then you can explain how what you're doing on the side has nothing to do with his business, addressing his specific objections if you can. He is probably concerned that you are steering business away from him, but if you can show him that they call you rather than the other way around, you may be able to salvage this.

Reply by Blueink_CA on 8/18/07 9:51pm
Msg #206453

I have an OT question for you - please check your PM.

Reply by Elizabeth Soliday on 8/19/07 12:45am
Msg #206464

I just got my real estate brokers license last month and my broker is concerned also. She doesn't think there will be a problem as long as I am not closing my own transactions. I did ask about sending a letter to those in my notary book to announce that I am now a real estate broker and we're not sure if that's improper use of my journal (for lack of a better way of saying it). Many of my clients have asked me to give them a business card (for real estate) after I get them, so my question is what do you think about sending an announcement with a business card? Is it too closely related to a solicitation?

My principal broker just sent an email to the real estate legal "team" in my state asking questions about conflict, so when I see the reply, I will let you know what Oregon says about it. I am interested in this discussion because I am in the middle of the same thing.

Reply by Susan Johnson on 8/19/07 8:34pm
Msg #206525

Thank you for your comment. Please let me know what you find out. I can't see where this would be a conflict if you didn't close any real estate transactions you or your company were involved with.

Reply by Elizabeth Soliday on 8/20/07 12:52pm
Msg #206607

Response from my principal broker

LIZ:

HERE IS THE RESPONSE FROM THE LEGAL HOTLINE.

WITH THEIR COMMENTS - I THINK IT IS BEST TO KEEP YOUR NOTARY BUSINESS
COMPLETELY SEPARATE FROM ALL STATE REAL ESTATE ACTIVITY.



IT APPEARS YOU SHOULD WRITE A DISCLOSURE (JUST KEEP COPIES ON HAND) FOR ANY
REAL ESTATE NOTARY ACTVITIY WITH YOUR NOTARY CUSTOMERS STATING YOU ARE A
LICENSED REAL ESTATE AGENT WITH THE STATE OF OREGON, THAT YOUR NOTARY
BUSINESS IS NOT IN CONJUNCTION

IN OTHER DO NOT ADVERTISE YOUR NOTARY IN CONJUNCTION WITH ANY ALL STATE REAL
ESTATE ACTIVITY/LETTERS, ETC. THIS ALSO MEANS ON REAL ESTATE BUSINESS CARDS

Reply by Lisa Prestegard on 8/19/07 7:02am
Msg #206472

As I see it...

I am a RE Broker in FL, and have held my license in MO as well. In my opinion, if your license were held by my Brokerage and you were conducting signings as a RE Licensee, there would be a conflict if the following were to occur:

1. If you were to close your own transactions (although in MO this is done frequently with no issues on purchase closings). Arms length, and all that... no financial interest in the transaction (commission), etc.
2. If you were to solicit real estate business before, during or after the closing. It is NOT ethical. Period.
3. If you use your journal entries (private information) to pump-up your marketing/farm list. (again, unethical and walking a very fine line w/privacy issues, GLBA, misuse of private info. etc)

If I were holding your license, I would advise you to be VERY careful as to how you use the information in your Journal and demand that you not solicit RE business during the course of your signings. If I thought for one minute that you were using Journal entries to add to your "farm" list, you'd be out on your ear.

Your "Notary" business card can list your various memberships on the back, such as "Member, Knoxville Board of Realtors, Lic. Salesperson". But to leave your RE business card at a signing? I wouldn't. You are there wearing a different hat. Leave it at that. If you've impressed them with your professionalism, and you've left them your Notary business card, they will find you when they need an agent.

** my .02 as I am not a licensed RE Broker in TN and do not know their laws concerning these issues **

Reply by NJ_Notary on 8/19/07 4:42pm
Msg #206507

Re: As I see it...

Hi Lisa,

I agree w/ you with some aspects but I think as another real estate broker/broker of record, I think we should clariffy for folks a few things so they do not get confused. Your mentioned ...

your "Notary" business card can list your various memberships on the back, such as "Member, Knoxville Board of Realtors, Lic. Salesperson".

Licensees are not licensed by any board of realtors. Every Board of Realtors is a trade orginazation and does not issue licensees, only memberships. The state in which a person is licensed issues the license. I come across this often with the general public who think the BORs is the go to and go all person when in actuallity the first person to go to is the state's licensing department. I get it as a committe member of the proffesional standard's committee at my local BOR. Likewise, while I can not speak for advertising and marketing in other state's in NJ by placing the verbage you just mentioned would be placing you in hot water with the NJREC. This has been clearly defined in NJ as a major NO NO and you can expect to be fined heavily. In NJ you must state the status in which you are licensed (ie salesperson, broker-salesperson/broker-associate/associate-broker, or broker of record) as well as the normal busines name of your brokerage firm (ie xyz realty). As well there would be also an issue because on the front of your card which states your notary office/cell number you would also have to place your re brokerage firm's telephone number. Any and all advertsing in the state of NJ MUST contain the brokerage's telephone number in the same size or larger print as any other number placed (ie cell number); likewise, the use of Home Office may not be used or you can expect a fine, this is just a given and has been explicitly mentioned by the NJREC. I see your point by what your thought in theory is but depending on the state inwhich you transact business one should be extremly careful as you can see by what i Have just mentioned. Again, this is just for NJ only but it is a good example. Moral of my comment, check with your state's regulation before doing anything.

You also mentioned..
If I were holding your license, I would advise you to be VERY careful as to how you use the information in your Journal and demand that you not solicit RE business during the course of your signings. If I thought for one minute that you were using Journal entries to add to your "farm" list, you'd be out on your ear.

I agree 100% but with some MAJOR MAJOR MAJOR caution. By making a said demand you are walking that fine line of implied and expressed employer/employee relationship. As we all know the better portion of agents and broker-salespersons are independant contractors. By making such a deman you may be changing that status of IC to employee which will open a big can of worms on you as a broker of record. To not have such issues, at first thought as a broker of record, I would put something in the IC's independent contractor's agreement that they sign with you when you sponsor their license/when they start affiliating with you (caution: this is something that I would have to check with legal counsel on , but this is just thru my experience I think may help you as the Broker of Record so dont quote me on it, its just a random thought). There also may be some Human Resource implications as well.

In NJ as long as you as the licensee are not receiving or have an interest in the signing there isnt a problem. I also don't see this as a conflict in general as long as you dont have any type of interest.

I see Brenda's point as well with the cross licensing, but as a licensee I do not see an issue with such as long as I as the licensee am not receiving an interest or 2) it is fully disclosed to the principal,mortgagor, etc.. I guess when I think of this the first thing that comes to mind to me is the one stop shopping that is gaining more and more popularity in the real estate industry. In the one stop shopping, the brokerage firm also owns wholy or as a sister company of such services as title agencies, hazard insurance Cos, Mortgage companies, etc.. This was just addressed in Realtor magazine with respect to who is earning what and who is leading in the one stop game. If you long onto Realtormag.com you may be able to view the article. It was new this year as a yearly feature. I also think it depends on the anxillary service offered to determine if there could be a conflict of interest. A brokerage firm clearly would not want to own or have a sister company such as a home inspection firm; whereas, a title agency would not. I think the big thing though in this case is clear concise written disclosure of the relationship between the companies to the principal,mortgagor, etc..

Ok sorry to go off on a tangent. Get me started and my thoughts start rolling. I should also mention that I used NJ only as an example and that every state's laws, regs, etc. differ so one should check with their legal counsel and state with respect to such. Ok thats a penny for my thoughts and i just gave my two cents worth. Now can someone please explain to me where the heck that other penny came from? I have always wanted to know that. LOL Have a great day everyone.

Reply by Susan Johnson on 8/19/07 9:06pm
Msg #206529

Re: As I see it...

When I go to a signing I never say anything about being a RE agent. I do my signing and I'm out of there. I do charge for the signing but I do not run it through the RE office. I keep that completely away from the RE office. I have done this for over 1 year and another agent happen to the people I closed a loan for and she told my broker that I was closing loans and he said I needed to run everything through the office or I ran a good chance of loosing my license. I still have a large ??? about that. We have several agents in our office that have property management businesses and we have to handle calls about their rentals and they do run that through the office?? I am still investigating this. Hopefully I will get an answer soon. Thanks for taking time and giving me your comment.

Reply by NJ_Notary on 8/20/07 2:26am
Msg #206550

Re: As I see it...

I dont know what your state's regulations are but for your broker demanding you to run in thru the brokerage firm smells fishy to me. It kinda seems like your broker only wants a cut of your fee. I dont know, but that kinda seems like what it appears. I may be way off base since ur in another state and I am not familar with your state's regs, but thats just what comes to mind.

Reply by NJ_Notary on 8/20/07 2:28am
Msg #206551

Re: As I see it...

sorry for the txt message slang with the "ur". As you can see i txt alot

Reply by Lee/AR on 8/19/07 8:51am
Msg #206477

That's how I got started in this biz--r. e. broker. However, I think I would be VERY CAREFUL about soliciting r. e. business while at a signing--or later. I think that notifying your signing biz people that you are now in r.e. by using your journal would be stepping over the Privacy Policy fence. Conversely, while at a signing, about 80% of the B's ask some variation of 'how did you get into doing this'? Answer: Am a r.e. broker also and was contacted by a TC to handle this...there ya' go. Now, if they ask for a biz card--they've solicited me!

Reply by BrendaTx on 8/19/07 9:52am
Msg #206485

Re: Conflict? I personally see lots of conflicts

... with crossing over from being a RE Agent to Signing Agent to Mortgage Broker, Escrow Officer, Legal Assistant in RE transaction firm to appraiser........on and on and........

No one else pays any attention to this criss-cross self-helping-backscratching or to my perspective on it so if I were you, I wouldn't either. (I don't. But, I think there's lots and lots of problems with it.)

----
It reminds me of Ray Stevens song about being your own grandpa (http://www.cowboylyrics.com/tabs/stevens-ray/im-my-own-grandpa-1793.html).

Reply by Dennis D Broadbooks on 8/19/07 2:42pm
Msg #206501

You DID Ask for This...

...didn't you?

http://www.metacafe.com/watch/54702/im_my_own_grandpa

Reply by BrendaTx on 8/19/07 8:57pm
Msg #206527

Re: You DID Ask for This...thanks Dennis! n/m

Reply by Susan Johnson on 8/19/07 9:30pm
Msg #206531

Re: You DID Ask for This...thanks Dennis!

The same reply goes for you too, Brenda. I don't need smart acting people, I need people that can help me with this question. I'm not sure what the grandpa video was all about. I ahve never seen it but I'm sure you can relate to it or you would not have sent it to me.
Thanks but no thanks!!!!!!!!!!!!!!!

Reply by Susan Johnson on 8/19/07 9:25pm
Msg #206530

Re: You DID Ask for This...

I really don't have time to watch a video. I could not get your video to play. I am asking for a serious answer not a smart acting answer. For the first time in 30 years my family is having to live on one income. My husband was diagnosis with terminal cancer so I don't need people like you trying to help me. Thanks but no thanks!!!!!!!!!!!!!

Reply by Dennis D Broadbooks on 8/20/07 4:43am
Msg #206552

I'm Sorry to Learn of Your Husband's Illness...

...& my reply was to Brenda, not directed at you. Perhaps if your difficult situation was made known to the board from the beginning the tone of the responses might have been different.

Reply by Susan Johnson on 8/19/07 9:36pm
Msg #206532

Re: THANKS TO ALL WHO RESPONDED

I appreciate all who answered my question with a thoughtful answer. I will contact the TN RE Commission this week and let you all know what I found out. Again, thanks.

Reply by LarryTN on 8/19/07 11:29pm
Msg #206539

I think that if you're closing a real estate deal in which you have no monetary interest (except your closing fees) it should be perfectly alright! I don't know of a law that pertains to this, but I think maybe your broker doesn't understand this!
By the way, we've just discovered some proposed legislation in TN that will be coming up for vote in Jan 2008 (HB2131) that evidently will require all closings under $100,000 be done in the office of the lender or the lender's agent! Might want to check that out!

Reply by SharonMN on 8/20/07 12:44am
Msg #206543

I don't know anything about TN real estate licensing laws, but to me, this looks more like a business conflict than a legal/licensing one. I can see why the company you work for might object if you are helping competing companies close their deals.

Reply by Susan Johnson on 8/20/07 6:44am
Msg #206553

Re: Conflict

Thanks for that info. We will see what happens with that.

Reply by Susan Johnson on 8/20/07 6:51am
Msg #206554

Re: LarryTN

Thanks for your info. That's interesting. Keep me posted on this if you can.