Real estate education in state get long-term boost

The program allows real estate brokers to voluntarily transfer interest earnings on their escrow accounts to Mississippi State's endowment for real estate education. Passed during the 1992 session and recently implemented at Mississippi State, the program goes by the acronym IREBEA. The letters stand for "interest on real estate broker's escrow account." It is supported by the Mississippi Association of Realtors.

According to Dr. Donald Epley, holder of the Robert Warren Chair in Real Estate in the College of Business and Industry, the program is patterned after one the Mississippi Bar has been operating for several years.

"The program is the only one of its kind in the United States set up to support education,” Epley said. "It is potentially a very significant source of funding."

Participation by real estate brokers is strictly voluntary, he emphasized.

Brokers maintain escrow accounts as a regular part of their businesses. The account usually is a buyer's monetary deposit put in care of a third party—a bank, for instance—and not delivered to the seller until the sale is completed.

"Traditionally, a separate interest-bearing account is opened if a client's or customer's deposit is large or is to be held for a length of time," Epley said. "All other clients' deposits are usually co-mingled in a standard account."

When a broker participates in IREBEA, interest from the standard account is paid directly to the university's endowment for real estate education. At Mississippi State, the funds go to the Robert Warren Chair, administered by the Office of Development.

"In that way, a permanent endowment is created and only the interest earned can be spent," Epley said. "No earnings can be made available to the broker."

IREBEA was written to avoid any tax consequence to the client, customer, or broker, he said. "After reviewing our proposal, the Internal Revenue Service ruled that earnings specifically designated to the Mississippi State account are tax exempt."

Currently, Mississippi State has the only IRS ruling of its type in the country.

Epley said that while interest earnings accrued from any one real estate office may not be large, the accumulation from all participating firms can add up rapidly.

"Everyone who has a broker's license should join," Epley said. "The funds support continuing education requirements."

Chairperson of the university's IREBEA Advisory Committee is Walter Becker Jr. ('66), owner of Commercial Real Estate Services in Jackson and 1994 national president of the Mississippi State University Alumni Association.

For additional information on the program, call Epley at 662-325-2341 or write him at P.O. Box DF, Mississippi State, MS 39762-5636.