Welcome to the Real Tea Podcast brought to you by Tennessee Realtors and sponsored by Rule First, helping you live closer to what matters.
I’m your host, Angela Shields.
This podcast is created for Tennessee Realtors to get the tea on all things real estate in Tennessee.
We’ll bring you engaging conversations with esteemed guests in the real estate industry and cover a wide array of topics, including current events, governmental affairs, education and legal updates.
Denise, welcome to the Real Tea.
We are so excited to have you.
And for those that don’t know Denise, this is Denise Baker, the executive director of TREC, the Tennessee Real Estate Commission.
So welcome.
Thank you.
I’m so happy to be back in this building.
It’s been many years, but thank you so much for having me today.
Yeah.
So a lot of people may not know that you were once a realtor.
I was.
I was once a realtor member.
Yes, I am no longer, but yes, I was once a member many moons ago.
Yeah.
So before we jump in to talking about your role as the TREC executive director, I have one question that I ask all my guests.
Okay.
So as I said, we’re called the Real Tea.
Okay.
So as you can see, we have a teacup sitting beside you.
What do you normally keep in your teacup?
I am not a coffee drinker.
Believe it or not, I am not a coffee drinker.
I love black tea and green tea, and I drink it depending on how much caffeine I need that day.
Typically, it’s green tea, but if I have a busy day, I love a cup of black tea.
I love both of those.
Those are great.
Great choices.
And depending on if it’s morning or night, if you’re ready to calm down.
It’s decaf if it’s at night, for sure.
Passion Tea by Tazo is my drink of choice in the evening, my tea of choice.
Nice.
Nice.
I love it.
So let’s go back.
You mentioned that you are a realtor.
And how many years?
I was first licensed in 2004, and I was licensed for many, many years.
I participated in leadership TAR before it became Tennessee Realters.
I believe I had my CRS, my GRE, and my GRI.
So I’m very familiar with the day to day of realtors across this state.
And now you’ve been in this role for almost two years.
Yes, I have been the executive director for nearly two years.
It will be two years in August and have really enjoyed every second of it.
How did being a realtor help with the transition into this role?
It helped in many different ways.
Not only was I once a member of this association, but I also have a master’s in public administration.
And with the fusion of those two, marrying real estate and public administration, it’s really helped me better inform this role and lead the Real Estate Commission here in Tennessee.
Great.
I would imagine that having actually been a practitioner before, you really understand as cases come forward, or you’re talking to licensees, or what have you.
What I love about it is you understand what we do.
Yes.
I can’t tell you how often, not from your side, but I can’t tell you how often we get calls from the public.
And they think that we are Trek and we have to explain, no, that’s not what we do at all.
And vice versa.
We have licensees that think we’re your organization and not Trek.
So it definitely goes both ways, for sure.
And so we have to spend a lot of time explaining.
So we even had a member that has called before, and they are inactive with their license, and they call us and it’s, I need to reactivate my membership, and we come to find out they’re not trying to reactivate their membership, they’re trying to reactivate their license.
And we have folks call us asking about your ethics training that you all offer.
So it definitely goes both ways.
And once being, well, excuse me, having once been a member, I’m really able to inform the team at Trek.
There’s 10 dynamic, amazing professionals that work the day to day at Trek.
Really better help them understand the day to day that licensees go through.
So they are able to better help your members as well.
Sure.
So if you had to say in a nutshell, what is the purpose of Trek and what do they do?
Well, Trek, the Tennessee Real Estate Commission, we are one of 26 regulatory agencies.
There are 26 regulatory agencies across the state, anywhere from cosmetology to funeral embalmers, to private investigators, to the folks you see at the Titans games, making sure that we’re all safe inside the stadium.
All those licensees are regulated.
There are about 300,000.
Actually, there are more than 300,000 licensees across the state of Tennessee.
As far as Trek is concerned, we license 44,000 of those licensees.
And so our goal at the Tennessee Department of Commerce and Insurance is to protect Tennesseans and empower professionals.
We protect Tennesseans by giving consumers an outlet and a avenue to make complaints, and we empower professionals by licensing those folks and removing the bad actors in those professions.
Right.
And it’s through your team that we make sure we have our classes that are approved, that they’re receiving the right type of education.
So we work closely with you with that.
Yes.
So Tennessee Realtors is an education provider through Trek.
So every piece of continuing education that is within the state of Tennessee, within Trek, when you get your 16 hours of continuing education has to be approved by the Tennessee Real Estate Commission.
And you all submit those classes to us.
And our new Director of Education, Brittany Morris, she reviews all that coursework and she approves, or excuse me, makes recommendation to the Commission for approval of those courses and instructors.
Right.
And we’re, I’m excited to get to meet her because she’s new to your team.
Yes.
She started in December, so she is undergoing pre-licensing education now to get a better understanding of what licensees do on a day-to-day basis.
She is reviewing all types of courses and instructor applications that we are going to be happy to present to the Commission members in April in Chattanooga, when we hold our next Commission meeting.
Great.
Great.
Well, I know she has a busy job.
Yes.
I know just from what we turn in, that’s a lot of classes, and it’s not like we’re the only school.
So you have a lot.
Yeah.
There are over a thousand classes, probably over 500 instructors.
Oh, wow.
We just went through a renewal cycle.
Instructors are required to renew every two years a license, as well as courses.
Those are required to be renewed every two years as well.
So we just underwent that process, and we renewed tons and tons of instructors as well as courses.
Yes.
Wow.
So you’ve had plenty of time to settle in, doing a great job.
And my question to you is, since being there, what are some of the things that you’ve seen themes or commonalities, I guess I would say, that with the complaints that come in, that you would like brokers to be aware, and maybe suggest to brokers that they teach their agents or talk to their agents about so that they’re aware that maybe these complaints could stop?
The commission, there are nine members of the Tennessee Real Estate Commission.
There are three from each grand division.
Most of them are practitioners of real estate.
Two are not.
So we have two members that are not.
To give a different perspective and to better inform the commission when they make decisions.
The cases that go before them range from unlicensed activity to failure to supervise and violations of escrow funds and escrow accounts as well.
The one that can be avoided is failure to respond.
If a licensee receives a complaint, it’s really, really important that they respond to that complaint, because if they don’t, the commission can, in their discretion, issue a thousand dollar civil penalty.
So it’s really, really important that if someone receives a complaint, one, you tell your broker, if you’re an affiliate broker or a broker that’s not managing others, and two, respond to the complaint, and then three, notify your E&O insurance company.
That is very important.
And since you bring up E&O, let’s talk about what is E&O and why it’s important for realtors to maintain it.
Okay.
E&O is very important.
E&O typically renews every two years.
The state of Tennessee policy is a little different this time.
It’s 18 months, and then it’s going to be on a two-year cycle as of July 1.
As I mentioned earlier, the Tennessee Department of Commerce and Insurance, our mission is to protect Tennesseans and empower professionals.
And E&O insurance allows that.
If for some reason there is an issue with the transaction, E&O insurance provides protection not only to consumers but to the licensee as well.
Right.
And so when there’s issues, it’s important you notify them immediately.
Correct.
Yes.
Okay.
So you were talking about escrow accounts.
Do you find that that is across the board that there’s issues, or is it a particular segment like property management, or is it just everywhere?
Well, last March, so March of 2024, we started audits again.
There was a, we did not continue the audit program, but in March, we restarted that program.
And so we’ve completed about 100 audits.
And as far as escrow accounts are concerned, what we are seeing, we’re seeing a lot of co-mingling of funds.
So make sure that your operating account is not the same as your escrow account.
Those need to be two different accounts.
We have seen Wendy’s on an escrow accounts.
I hate to call out Wendy’s, but a variety of places.
That’s good restaurants.
Yes.
A variety of places that have no business being in an escrow account.
Sure.
Well, that makes perfect sense.
Yes.
So, what would you see are some of the biggest challenges facing realtors, and what are some of the ways that Trek can support them?
Well, some of the challenges that we have come into lately is that a licensee or licensees that don’t know their expiration date.
It’s very important that you know your expiration date so that you are not issued a civil penalty for paying late or it lapsing and you have to retake the exam.
So it’s very, very important that only that you know your expiration date and renew your license in a timely fashion.
But it’s also important that you have and maintain current E&O insurance as well.
Those are the two things required for licensure in this state and it’s very, very important that not only you have those two things, but take your continuing education.
You do not want to be penalized for not taking that 16 hours of continuing education in a timely manner.
So what happens if someone were to find out that their license had expired and they were unaware and they’re continuing to practice?
Well, several things can happen.
One, a complaint can be open for unlicensed activity, because at that point, the licensee is not licensed.
So if a licensee were to find out that their license is expired, it’s really important that you contact our office, ask us what you need, if it’s continuing education, if you need to pay a fee, excuse me, if you need to pay a fee.
And there are occasions where a civil penalty is issued or a penalty is issued for paying late.
It’s about $50 a month per 30-day period.
After a year, you are a retest and reapply candidate.
So it’s, again, back to your first piece of advice, stay on top of it.
Yes, yes.
Remind your phone to remind you that a month before your license is to expire, make sure that you renew it.
We also mail out postcards three months before a license expires to remind you to renew your license.
So as soon as you get that postcard that is mailed to your broker’s office, take it.
It is a beautiful blue, turquoise color.
Take it and renew your license.
And just to reiterate, you said that it goes to your broker’s office.
It doesn’t go to your home address.
If you are a retired licensee, it goes to your home address.
If you are an active licensee, it goes to your broker’s office.
Okay.
That’s good to know.
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I’m gonna switch gears a bit.
Tell us about the high school program.
We get a lot of questions about that.
It’s been in the news, and we hear a lot of people that are interested in that program.
Well, we first started the high school program last year.
We’ve been under contract to implement this program for quite some time.
We implemented the program for the first time last year.
We had a lot of interest from across the state of Tennessee, but there’s some tweaks to the program that we’ve made this year that I would love to announce today.
Please do.
So we are going to begin accepting applications around April 15th for 2025 high school graduates.
They can submit an application, a letter of interest or a letter of recommendation to our office, and we will review it and sign them up for the program.
We are going to accept about 125 students across the state of Tennessee.
And to continue to be a part of the program, you have to meet certain benchmarks.
And so that’s going to be outlined in the application as well.
So we’re really stoked about the program this year.
Yeah, that sounds great.
Well, anything we can do to help get that word out, we will be happy to do that for you.
Yes, we are going to, of course, issue a press release.
And I know you guys communicate to your members quite regularly.
So if you could help push that message across the state, we would greatly appreciate it.
Very happy to do that.
So thank you for sharing.
That’s exciting.
Let’s switch back to the legislative session right now.
So are there any recent or upcoming changes to the state regulation that Realtors should be aware of?
Well, I’m so glad that you mentioned that we’re currently in session.
So anything can change.
We’re filming this, I believe it is, let’s see here, March 19th.
So anything can change between now and when session ends.
Well, in the next hour, if we want to be honest.
But right now, there’s legislation being proposed that would end grandfathering for brokers that manage other people.
So if you’re a managing broker, you would be required to do 16 hours of education.
Now, it hasn’t passed yet, so I want to give that caveat.
But as of, if it does pass beginning next year, you will be required to have 16 hours of continuing education if you were once grandfathered.
Right.
And I know that’s a bill that we have actually sponsored and found that to be so important because there’s so many things that change so often.
And our Governmental Affairs Committee felt that if you are managing people, it was important to stay up on those changes to make sure you’re passing that information down.
So that’s a huge thing for Tennessee realtors.
For sure.
It goes back to protected Tennesseans and empowering professionals for sure.
With the consumers, absolutely.
So tell me, the Commission meets every month, and I think you take a couple of months off in the summer, is that right?
We this year are meeting every other month.
This allows for us to be more in line with other regulatory boards that are across the state.
So we’re meeting six times this year, every other month, beginning in February.
So February, April, and it goes on.
So far, so good.
We’ve, I know the team at Trek that handles the day to day appreciates having a little lead time before the next meeting.
Yes, and will they still be going out into the communities to do the meetings that they’ve done some?
Yes, yes.
So next month in April, we will be hosting the East Tennessee meeting in Chattanooga with Chattanooga Realtors, Greater Chattanooga Realtors.
And then in October of this year, we will be headed to West Tennessee.
A location has, excuse me, a location for that meeting has not been selected yet, but we will be in West Tennessee later this year.
So are licensees, they’re eligible, they’re allowed to come and sit in on the meetings?
Yes, we welcome licensees to attend the meetings, not only here in Nashville, but when we’re in East Tennessee and when we’re in West Tennessee.
And if a licensee attends a meeting, they receive eight hours of continuing education.
The meetings last anywhere between three to four hours, unless, I need to give this caveat, there is a hearing.
It could go into two days.
But it’s still an excellent way to hear the commission discuss the topics that are going on with the Tennessee Real Estate Commission.
I’ve had licensees come up to me and personally say they’ve learned more sitting through a commission meeting about what not to do than they do during continuing education courses.
So can they sit in on the hearings?
Yes, yes, it’s required to sit in on the hearings if you’re coming for continuing education.
So if there is a hearing coupled with a meeting, you’re required to attend both in order to receive the eight hours of CE.
Okay, and some may not know that you can actually watch them online, not for CE.
Yes, you can watch them online, but not for CE.
Right.
And you can go back and watch it.
You can fast forward it on YouTube.
It’s great.
Yeah.
So I know that we’re able to do that sometimes.
And but I think it is interesting to know that you can go to the session and actually get the CE.
Yes.
So that’s that’s very interesting.
So, Denise, let’s talk about Aurello.
A lot of our members may not even realize that that organization exists.
And I know that Tennessee is a part of the organization.
Yes, we’re members of Aurello.
Aurello stands for Association of Real Estate Licensing Law Officials.
And the organization, the association makes up of commission members from across the country, as well as executive directors, directors of education for commissions across the country and their equivalent.
So they may be called something slightly different in another state, but it’s basically Trek in another state, Alabama, Georgia, Tennessee, Hawaii, Texas, all over the country.
Right.
And so you’re able to get together and share best practices or what have you about what’s going on in all of the different states.
Yes.
And learn from one another.
Yes.
We definitely learn from one another.
Personally, I am a member of the examination committee.
So I help inform the national exam across the country.
So the association really holds a true purpose in that we are trying to further, we’re trying to further real estate licensing across the country and make sure that we know what every state is doing.
That way, if a licensee from another state wants to enter into Tennessee, we are able to tell them what continuing education or what pre-licensing education will be required for licensure in this state.
I would imagine it helps with reciprocal licenses too.
For sure.
For sure.
For sure.
Yes, we know what every state is doing, what is required at the affiliate broker level, at the broker level, and if they want to enter into Tennessee and practice, we are able to tell them what pre-licensing education is needed, if any is needed, and what tests are required.
There are some states that don’t have a national test.
And so then if they enter in the Tennessee market, they’re required to take the state and the national exam.
There are other states that have the national test, and our national test is modeled after Aurello.
So they only have to enter the state and become licensed by passing the state exam.
So that kind of explains the whole reciprocal idea.
So you base it on what the other states are requiring.
What the qualifications in the other states.
For example, some states only have 30 hours of pre-licensing education.
Well, if they were to enter into Tennessee, they would have to take 60 additional hours of pre-licensing education to be licensed here in this state as an affiliate broker.
I can tell you, we’ve really taken the time to study some of the global, just across the world, and there are so many countries so envious of the United States and the whole system, and kind of hearing you put that into perspective really makes it make sense, because we’re much more organized.
A lot of countries don’t even have licensees, or if they do, it’s just a mess.
Well, it goes back to TDCI’s mission of empowering professionals and protecting Tennesseans.
We really want to protect the consumer and empower professionals all at the same time.
That’s why licensing is so important.
Yeah, and I’ll even take it a step further, is that even with the realtor organization, it’s the same mission that we’re serving our members, but we do have the code of ethics that also protects the consumer, so to me, it always works hand in hand, because you all are obviously the licensed piece of it, education piece of it, and then we continue the education piece of it, and then have the code of ethics, which takes it a little further with the ethical side of it.
So if you were thinking about it, not from giving advice on how to be a good agent, but how to focus in on some of the things.
I’d tell a broker agent to pay attention so that you don’t end up in front of the commission.
What are maybe three pieces you’d stay really focused on?
I know you said these are the things we see a lot, but what would you tell them to really focus in on and pay attention to these things so you don’t end up in front of the commission?
For sure.
Advertising.
We receive a ton of advertising complaints.
Make sure that if you are not a managing broker, that you’re showing your advertising to your managing broker, so they are able to check that it is in compliance, because that’s really important.
Making sure that the firm name is larger than your name, making sure you have the firm telephone number on your advertising, those things are important.
And we’re seeing tons of complaints that come into our office that do not adhere to our advertising guidelines.
And then I’m going to go back to E&O Insurance, making sure you have an up-to-date policy, and making sure, lastly, that you are in compliance with your expiration date.
You know what that date is, and you are complying and renewing your license.
It’s only $75, the fee has been reduced, so it’s only $75 to renew your license in Tennessee.
Yeah.
Going back to those complaints for just a second, can they be turned in anonymously, or do you have to have a name?
You do not have to have a name to turn in a complaint.
It helps if we do have contact information for the person that is complaining and that submits the complaint.
That’s important because sometimes something is missing, and we would like to ask follow-up questions.
But if you prefer to turn in a complaint anonymously, we will take it.
You can include your supporting documentation.
Sometimes we get anonymous complaints in reference to advertising.
Just make sure you are uploading the advertisement that you’re complaining about, and we will investigate the matter and review it.
Yeah.
And the advertising is what made me think about that because that’s pretty easy if you have the ad to turn that in.
So making sure you have that right is important.
And I just also want to point out, it’s not only print advertising.
This includes any advertising on social media platforms.
It includes on the radio station.
We have a whole advertising section full, or excuse me, our rules have a full section about advertising.
So make sure you really review those and you under, or excuse me, licensee reviews those and understands those.
So they are in compliance with all of our advertising rules.
And the last thing I’ll ask you, is there any resources that you offer on your website or anything like that?
I know you put out a newsletter.
Do you have anything that a licensee can go to and be able to research or just see tips or anything like that that they can find?
Well, we offer several things.
First of all, you can go to Trek’s website and review all of the Trek statutes that we follow, as well as all of our rules.
So that’s number one.
Make sure you are familiar and comfortable with those.
Two, our newsletter is a great source of information.
It comes out quarterly.
We’re getting ready to put out a new one in April to talk about the Tennessee High School program again, as far as seniors in high school becoming licensed agents in the state of Tennessee.
And then lastly, we have a list of all courses and providers on our website that people can go through and see what’s offered where and who is providing that continuing education course.
And your website is?
Just Google the Tennessee Real Estate Commission and I promise it will pop up.
However, I just want to pull in out this caveat.
Make sure you’re using a site that says.gov.
If its.com, it’s not the Tennessee Real Estate Commission.
So make sure you’re using the website that says.
That begins with TN.gov.
Yeah.
And I’m going to say that you all always come to anything that we’ve invited you to just like today.
You typically are a panel at our track.
Our track.
Listen to me.
At our 10x conference.
And we’ve had you at the 10 sites.
So anything that we’ve had that we ask you to come and give information, you’re always there.
So thank you for that.
You’re welcome.
And I just want to point out, we love getting the word out.
Whenever we’re invited, we will show up.
We were in Murfreesboro last week at their broker summit.
So we really enjoy interacting with licensees across the state of Tennessee.
Yeah.
One last thing I would like to mention, if it’s okay.
Yeah, you go ahead.
We are partnering with our E&O insurance provider, Rice Insurance, to have educational opportunities across the state.
Our first one will be in Chattanooga on April 8th, and we hope that licensees in the Chattanooga area come out to that free education session that we’ll be holding.
And I’m sure details about that education can be found on the Greater Chattanooga Area Realtors website.
That’s great.
That’s a great opportunity.
So thank you for sharing.
Yes, and it’s two hours and you’ll learn a lot.
Yes.
All right.
Well, I think our time has come to an end.
Like always, it goes by so fast.
And we do appreciate you being here.
My pleasure.
It’s great to be back in this building.
Yeah.
Well, thank you.
All right.
Thank you.
Thank you all for joining us today on the Real Tea Podcast.
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Then visit tnrealtyrs.com to submit your questions and topics for future episodes of the Real Tea Podcast.
Thanks for listening.
