Transcript Ch 8 Real Estate Brokerage.ppt

Ch 8
Real Estate Brokerage
Outline
I. Real Estate Brokers vs. Sales Associates
II. The Real Estate Sales Process
III. Real Estate Regulation
IV. Legal Aspects of Agency Relationship
V. Other Real Estate Brokerage Related Issues
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I. Real Estate Brokers vs.
Sales Associates
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A real estate broker is an
brings together
negotiating agreements between them,
their orders, and receives a
compensation for services rendered.
who
, assists in
executes
in
Brokers vs. Agents:
Real estate brokers are individuals licensed by
state governments to arrange real estate sale or
lease transactions.
Real estate sales associates (or salespersons) are
also individuals licensed by state governments to
arrange real estate sale or lease transactions but
.
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II. The Real Estate Sales Process
1. Listing presentation
2. Listing agreement
3. Marketing the property and qualifying
buyers
4. Presentation of offers and negotiations
5. Contract
6. Services (surveys, inspections, etc.)
7. Settlement or closing
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II. The Real Estate Sales Process
1. Listing presentation
- goal: to get the listing agreement signed
- usually done in 2 meetings
- use listing (or seller’s) package
2. Listing agreement (4 different types):
i. open listing:
the “selling” (buyer’s) broker earns the commission
ii. exclusive brokerage (or agency) listing:
the “listing” (seller’s) broker earns the commission, but the
seller reserves the right to sell the property
iii. exclusive-right-to-sell listing
the “listing” (seller’s) broker earns the commission, even if
the seller sells the property
iv. net listing
the seller is guaranteed a “net” sales price
v. limited service listing
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the broker provides some services for a fee
II. The Real Estate Sales Process
3. Marketing the property and qualifying buyers
- marketing strategy is very important to create interest
- qualifying buyers eliminates waste of time
4. Presentation of offers and negotiations
- use the sales contract (buyer’s) package
5. Contract
- the FL real estate sales contract is very complicated
- hire a real estate attorney
6. Services
- surveys, inspections, repairs, appraisals, insurance, etc.
7. Settlement or closing
- title converts to new owner(s)
- all funds are exchanged
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III. Regulation of the Real Estate
Profession
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Anyone wishing to provide real estate services
to others for compensation must be licensed
by
The intent of licensing laws is to
In Florida, Chapter 475 of the Florida Statues
provides regulatory authority regarding the
real estate industry to the Florida Real Estate
Commission (FREC).
Department of Business and Professional
Regulation (DBPR), Division of Real Estate,
provides investigative and administrative
services to FREC.
Link to Florida statutes:
http://www.flsenate.gov/statutes/index.cfm
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When is a Real Estate license
necessary in Florida?
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Advertising real estate services
Representing buyers
Representing sellers
Arranging rentals (leases) or
providing rental (leasing) information
Auctioning
Exchange
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When is a license not required in
Florida?
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Property owners buying, selling or
leasing for themselves
Employees of owners who are paid a
salary (only)
Court appointed representatives
Cemetery lot sales
Rentals in a mobile home park
Lodging facility operations
Selling time-shares that are
registered as securities with the SEC
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Florida Sales Associate License
Requirements
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Pay application fee & finger prints ($200)
18 years or older
High school diploma or equivalent
63 hours course (FREC I) & pass with
70%+ ($245)
Pass state exam with grade of 75%+
45 hour post-license course before first
renewal ($125)
14 hours of continuing education every
renewal ($20)
Pay renewal fees every 2 years ($100)
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Florida Broker License
Requirements
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Active as salesperson for 24+ months
Pay application fee & finger prints ($200)
72 hour course with grade of 70%+ ($345)
Pass state exam with grade of 75%+
60 hour post-license course before first
renewal ($290)
14 hours of continuing education every
renewal ($20)
Pay renewal fees every 2 years
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Other Florida Licensing Laws
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License Categories:
Active vs. inactive status
(voluntarily / involuntarily inactive)
Reciprocity:
In general, there is no reciprocity with
other states. However, some states
recognize experience of FL licensees.
Residency: is not a requirement for a FL
real estate license
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IV. Legal Aspects of AgencyRelationship
“Agency relationship”: the
authorizes the
to act on his or her behalf and best interest.
3 different agency relationships in real estate:
1) owner
↔
broker
(single agency)
2)
broker
↔ buyer
(single agency)
3) broker
↔
sales associate
A fiduciary is in a relationship of trust and confidence with the
principal.
Note: A transaction brokerage relationship is not an agency
relationship.
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Single Agent’s Duties to Principal
in Florida
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Loyalty (protect client at all times)
Full Confidentiality
Obedience
Dealing honestly and fairly
Obtain best price and terms
Recommend action on offers
Full disclosure of material facts AND
rumors of facts
Accurate accounting for all funds
Skill, care, and diligence
Present all offers
Not a duty for a
transaction
broker
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Fraud vs. Misrepresentation
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Fraud: a fiduciary makes a false
statement material to a transaction
that is justifiably relied on by the
client,
,
resulting in injury to the client.
Misrepresentation: the same as fraud
except
.
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Termination of Agency
Relationships
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when a transaction occurs
when the agreement expires
when the parties agree to terminate
when one party breaches the
agreement
when one party becomes
contractually incapacitated
the listing property is destroyed
the listing property is condemned
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V. Other Brokerage Issues
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Franchises
Desk Fee Arrangements
Broker and Sales Associate Compensation
 usually calculated as a percentage of the
transaction amount:
residential
%,
commercial
%
lots
%
 broker and sales associate often have an
agreed upon “split” between themselves
 a commission is earned when a ready,
willing and able buyer is procured
The Multiple-Listing Service (MLS)
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National Association of Realtors
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Not all real estate licensees are
Realtors!
Membership in the NAR (and its
state and local organizations)
requires payment of dues and a
pledge to adhere to
.
Membership in the NAR is a
requirement for access to the MLS.
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