Audits: Real estate

Find out what our real estate auditors look for and what happens after an audit.

Conducting audits

We conduct routine audits on a regular schedule. We may conduct special audits in response to customer complaints or other priorities. We conduct all audits remotely.

Recordkeeping requirements

You must keep records for at least 3 years. All records must be available to the auditor at the license location upon request.

Audit process

The following are basic guidelines used by auditors when conducting audits. Auditors aren't required to follow these guidelines exactly. They may examine more or less than the areas listed. We provide this information only as a guide to licensees as they conduct their business.


During an audit, the auditor will verify:

  • Business signage and advertising. This includes but isn't limited to:
    • Letterhead.
    • Business cards.
    • Websites.
    • Promotional items.
  • Licensees are doing business as licensed.
  • The firm/branch is doing business as licensed.
  • All licensees are properly licensed.
  • Your firm's Business License and Uniform Business Identifier (UBI) numbers match the license.
  • Controlling interest in the firm.
  • All DBA and assumed names.
  • The designated broker completes a review of new licensee’s contracts and agreements within 5 business days.
  • All licensees submit contracts and agreements to the firm or designated broker within 2 business days.
  • If the office is a main office, a branch, or the only office for the firm.
  • Where you keep branch office records.
  • How and where you maintain records (e.g., online, hard copy, etc.).
    • If you keep records online, the auditor will verify that backup files are in place.
  • Verify you're setting up trust accounts properly set up and in the firm’s name as licensed.


The auditor will review:

  • Your firm's written policy/procedures manual. The manual must include:
  • Your log, including any real estate brokerage services, such as:
    • Purchase and sale agreements.
    • Listings.
    • Buyer brokerage agreements.
    • Unaccepted offers.
    • REOs.
    • Failed sales.
    • Multiple offers.
    • Property management agreements.
    • Leases.
    • Referral agreements.
    • Consulting agreements.
    • BPOs.
  • Transaction files within the last 3 years, including but not limited to:
    • Listing agreements.
    • Brokerage Services Agreements.
    • Closed and pending purchase and sale contracts, including addenda, special agreements, and attachments..
    • Other real estate activity that the licensees may have performed, such as:
      • Failed sales.
      • Unaccepted offers.
      • Referral agreements.
      • Consulting agreements.
      • REOs.
    • Complete/accurate Agency Disclosure.
    • Compensation Disclosure (if applicable).
    • Mutual agreement dates.
    • Closing statements.
    • Earnest money receipts (delivery of earnest money) for both listing and sales files.
    • All other documents, material correspondence and electronic communications related to each transaction.
    • Reviews of brokerage service contracts involving licensees with less than 2 years' experience.
  • Trust accounts, including but not limited to:
    • Owners.
    • Tenants.
    • Associations.
    • Earnest money accounts.
  • Bank records for all trust accounts for the 2 months before the audit. The auditor may request up to 3 years of records if necessary. The audit may review the following records:
    • Bank statements.
    • Pre-numbered check stock.
    • Canceled checks (front and back).
    • Deposit slips (receipted by bank).
    • Wire transfer confirmations.
    • Voided checks (defaced).
    • Check registers or other records of receipts and disbursements.
    • Trust account bank reconciliations.
    • Property management trust accounts corresponding invoices or receipts (to verify actual expenses).
    • Ledgers (liabilities) for both owners and tenants.
  • A sampling of management agreements.
    • This is to verify that both the designated broker and the property owner signed the agreement.
  • A sampling of owner property management agreements.
    • This is to ensure they follow state laws and rules.
  • A sampling of leases or rental agreements.
    • This is to compare the security deposit liability in the agreement to the liability in the security trust account.
  • Current tenant leases for compliance with state laws and rules.

After the audit

The auditor will prepare an Audit Results Letter. We'll provide the letter to the designated broker. You'll need to correct any irregularities on the audit by the date listed in the results letter. You must provide documentation of the corrections to the auditor.

We'll notify the designated broker if you don't need to make any corrections.

Further clarifications

The auditor will deliver a report to the audit manager. The audit manager will decide if we need more documentation or clarification. The audit manager will also decide what action(s) to take. They may decide to:

  • Take no further action.
  • Send a letter asking for more information or documentation.
  • Send a letter asking for compliance.
  • Send a letter of education.
  • Close the audit.
  • Refer the report to our legal staff for a disciplinary action or fine.
    • If we refer the audit for legal action, we'll contact the designated broker with the results. This will happen when the investigation is complete and legal staff have reviewed it.

Audit findings

The designated broker should immediately start correcting any problems found in the audit.

  • Identify the source of any overage or shortage found in trust accounts.
  • Take immediate corrective action as needed. If you disagree with the findings, contact us to request further review.

Stay informed

Need additional help? Here's how to contact us:

call Phone: 360-664-6515
(TTY: Call 711)
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