This form is used by an agent as a record when they close a sales transaction, to prepare a summary report of the agent’s activities, information on the principals and providers involved and fee arrangements for supervisory review and marketing analysis by their broker.
Transaction tracking by a paper trail
At the core of a broker’s supervision of their agents is their duty owed the California Department of Real Estate (DRE) to be aware of each agent’s activity on real estate transactions, whether on behalf of a buyer, owner, tenant or lender. To achieve compliance, the broker needs to require their employed agents, whether sales agents or associate brokers, to report when:
- a listing is taken;
- an offer is accepted; and
- a sale closes escrow.
However, prudent brokerage practice requires agents and associates to report transaction activity by documentation at each critical stage of the representation of a client. It is the primary evidence of documentation by their agents disclosing their activities which helps the broker fulfill their duty to supervise. It also gives the broker a literal paper trail to refer to in the event something goes wrong (i.e., if an agent is negligent or a client pursues legal action against the broker and one of their agents).
When a sales agent enters into a listing with a client for the services of their broker’s staff, they need to prepare and submit a checklist type of form to the broker’s transaction coordinator (TC). On the form, they note all relevant information about activities undertaken in the employment. This includes information on:
- the type of employment created by the listing [See RPI Form 522 §2];
- the agreed-to brokerage fees [See RPI Form 522 §3];
- the property to be sold [See RPI Form 522 §4];
- how the listing was obtained [See RPI Form 522 §5];
- the client [See RPI Form 522 §6]; and
- office duties required to service the client. [See RPI Form 522 §7]
The broker’s supervisory review
Often, the broker’s TC or office manager, rather than the broker, works directly with the seller’s listing agent to identify the steps to be taken to fulfill their due diligence obligations owed the client. This includes actions the coordinator can assist with, like ordering the for-sale sign and installing the key safe on a sales listing. [See RPI Form 521 and 521-1]
The broker reviews these completed forms, directly or through the TC or office manager they have employed. The review needs to be performed regularly, once a week or at minimum once a month, depending on the experience of the agent, the nature of the listing and the size of the broker’s staff.
The broker will find it helpful to have agents report all actions taken on behalf of a client who has employed them in a single, separate file activity sheet for that client. Additionally, reports tracking each action on the listing assist the sales agent as a review of their time spent with each client. Keeping records induces efficiencies when scheduling activities and planning for future listings. [See RPI Form 520]
Documenting the closed sale
Finally, when escrow is closed on a sales transaction, a property sold report is prepared and submitted to the broker or their management team.
The Property Sold Report published by Realty Publications, Inc. (RPI) is used by an agent when they close a sales transaction as a summary report, to document information on the principals and providers involved and the fee arrangements for supervisory review and marketing analysis by their broker. [See RPI Form 523]
The Property Sold Report lists the transaction details, including:
- the property’s sales price [See RPI Form 523 §4];
- the fees paid to the broker, their agent and any referral fees [See RPI Form 523 §§5-8];
- any disbursements from the agent’s share of fee [See RPI Form 523 §9]
- multiple listing service (MLS) reporting information [See RPI Form 523 §10];
- the trust funds received and distributed [See RPI Form 523 §11];
- a list of the service providers involved [See RPI Form 523 §12]; and
- information on the buyer and seller for structuring future marketing. [See RPI Form 523 §§13-14]
If the property does not sell and the listing expires, the agent files an expired listing report. Here, the agent details the steps taken to sell the property, why the property did not sell and whether or not the brokerage ought to consider working with this client in the future. [See RPI Form 522-1]
Gathering marketing information
When the broker creates their marketing plans, they use the information in the Property Sold Report. Since the listed property produced a sale — the very objective of the employment — it provides valuable information concerning which marketing activities are successful and what ultimately attracted the buyer to the listing. It also allows the broker to organize the buyer and seller into demographic categories.
For example, the broker will know the type of property sold, and whether the buyer and seller use the property as owner-occupiers or investors. [See RPI Form 523 §§3.1 through 3.2]
The broker may then add the buyer and seller to an electronic database of prior clients. Here, the broker organizes the client information obtained through the details of the transaction — like the type of properties they have bought or sold or whether they are occupants or investors — into their database used to market materials to those prior clients.
Here, the broker has created a depository of information to optimize their marketing techniques. For example, when the client is an investor, the broker knows to send materials pertaining to investment properties to them. Likewise, when the client bought a single family residence (SFR) and was a first-time homebuyer, the broker schedules a reminder to send an annual congratulatory message. Doing so helps the broker remain in contact and receive future referrals from that client.
Form updated 11-2015 to include the Form Description at the top, white header/footer convention and RPI branding.
Form navigation page published 11-2021.
Form-of-the-Week: Listing Information Report, Property Sold Report and Expired Listing Report — Forms 522, 523 & 522-1
Form-of-the-Week: Property Sold Report — Administrative and Fee Information — Form 523
Article: Tracking transactions handled by a broker’s agents
Brokerage Reminder: All about DRE audits
