Audits by the Real Estate Commission can be intimidating for any real estate management firm. The right preparation tactics will assist with facing this process with confidence. An audit should not be considered an obstacle or nuisance to overcome. It is also an opportunity to ensure business is running efficiently and in compliance with state and federal property laws
Know What the Real Estate Commission Looks For
Understand the Laws
Become familiar with the state’s real estate commission rules and regulations. Conduct research using viable local and state online resources. Networking with local property management firms provides a deeper insight into the actual audit experience.
Conduct Mock Audits
Create a checklist using the information gathered during research. A self-audit could be used as an indicator of the efficiency of the current system in place or highlight the areas that could use improvement. This is a proactive step that can save you from unpleasant surprises during the real audit.
Review Your Records
Keep a detailed record of business expenses and allocation of funds on and offline. Ensure all your transactions, client records, and financial documents are complete and up-to-date to avoid issues during the audit. Any discrepancies will flag their attention. All of your financial accounts must align with your bank statements in order to avoid further investigation, fines, or legal ramifications.
Perform Compliance Training
Prepare Your Team
Make sure each team member is well-educated on how to execute all compliance procedures required by the real estate commission. They should become acquainted with the state laws, requirements, and their purpose. Understanding the importance of meticulous record-keeping will motivate them to comply with the guidelines they are taught. Develop mandatory workshops and seasonal training so everyone is educated and held accountable for their role in compliance.
Update Business Policies and Procedures
Periodically review and update office policies and procedures. Notify team members of any changes or addenda to the current policies they must incorporate into their daily work routine. Keeping everyone on the same page will leave little room for the auditors to discover.
Remain a Step Ahead of the Audit
Real Estate Tech Tools
Many new software application developments in the real estate industry have simplified team and lead communication, record keeping, goal tracking, accounting, and delegation. These tools make digital files easier to manage, organize, and present to the auditors.
Professional Guidance
Get an expert compliance consultation from a legal expert in the real estate industry or an experienced auditor. They will provide valuable insights, and tips, and are equipped to assist you with addressing complicated issues you may come across. Knowing the law also helps you know your rights. Legal counsel will dispute any infringement of those rights.
Preparing for an audit by the real estate commission is all about diligence, organization, communication, and a commitment to comply with the rules and regulations under their jurisdiction. Following a strategic preparation guideline will also strengthen the foundation of success for your real estate management business.
Published by: Martin De Juan
