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©2011 Cengage Learning
Chapter 15 A Career in Real Estate & The Department of Real Estate License Requirements California Real Estate Principles ©2011 Cengage Learning
Chapter 15 Part I 1. Describe the major career choices in the real estate industry. 2. List the requirements to become a licensed real estate salesperson or broker. 3. Examine the personal questions to consider before becoming a real estate agent. ©2011 Cengage Learning
Real Estate Licenses Appx. 500,000 California licensees (as of 07/06) Broker licensees = 30% Salesperson licensees = 70% ©2011 Cengage Learning
SALES SPECIALIZATION Residential Commercial Industrial Business opportunities Agricultural ©2011 Cengage Learning
LAND USE SPECIALIZATION Land development consultant Land development Urban Planning Real estate securities Syndication ©2011 Cengage Learning
PROFESSIONAL SERVICES Real estate counselor Property manager Investment analyst Appraiser Loan officers Real estate educator ©2011 Cengage Learning
Related fields of Employment Title company officers Escrow agents Right-of-Way agents Government employee Employees of chain operation ©2011 Cengage Learning
REAL ESTATE TRADE ASSOCIATIONS National Association of REALTORS® NAR (www.realtor.org)www.realtor.org REALTORS® REALTOR-Associate® California Association of REALTOR® CAR (www.car.org)www.car.org National Association of Real Estate Brokers® NAREB Realtists® California Association of Real Estate Brokers® CAREB ©2011 Cengage Learning
DESIGNATIONS ABR Accredited Buyer Representative Real Estate Buyer’s Agent Council (www.rebac.net)www.rebac.net AIREA American Institute of Real Estate Appraisers AMO Accredited Management Organization ASREC American Society of Real Estate Counselors CCIM Certificate in Commercial Investment Marketing (www.ccim.com)www.ccim.com CPM Certified Property Manager Institute of Real Estate Management (www.irem.org)www.irem.org CRB Certified Residential Broker Council of Residential Specialists (www.crs.com)www.crs.com ©2011 Cengage Learning
Designations CRE Counselor in Real Estate (www.cre.org)www.cre.org CRS Certified Residential Specialist Council of Residential Specialists (www.crs.com)www.crs.com GRI Graduate, Real Estate Institute IREM Institute of Real Estate Management (www.irem.org)www.irem.org MAI Member, Appraisal Institute WCR Women’s Council of Realtors ©2011 Cengage Learning
Real Estate License law 1st state to enact a law for licensees 1917 first state license law Real Estate Act of 1919 Written examination IMPORTANT CALIFORNIA EVENTS ©2011 Cengage Learning
RE Sales License 1. Must be 18 or older & legal U.S. Resident 2. No criminal record 3. Pass RE Principles, Practice, and one other DRE approved course 4. Pass 150 question exam 70% (105 questions) 5. Application, licensee fee, and fingerprints 6. Issued a 4-year license MUST WORK FOR BROKER ©2011 Cengage Learning
Salesperson LICENSE Submit to DRE: license application pay license fee provide live-scan fingerprints Meet renewal requirements every 4 years MUST WORK FOR A BROKER ©2011 Cengage Learning
LICENSING REQUIREMENTS Broker AGE: Minimum 18 years of age No criminal record Education: 8 approved real estate courses Including: RE Practice, Legal Aspects of RE, RE Finance, RE Appraisal, & RE Economics or Accounting Experience: 2 years as salesperson ©2011 Cengage Learning
1. Real Estate Appraisal 2. Real Estate Finance 3. Real Estate Practice 4. Legal Aspects of Real Estate 5. Real Estate Economics or Accounting 6. Plus 3 more elective Real Estate courses ©2011 Cengage Learning Broker Education : 8 Required Courses
Broker Education Real Estate Principles Business Law Property Management Escrow Real Estate Office Administration Mortgage Loan Brokering Real Estate Advanced Law Mortgage Loan Brokering Real Estate Computer Applications Advanced Finance Advanced Appraisal ©2011 Cengage Learning Select 3 additional courses from the following:
EXPERIENCE Two (2) years full-time experience Or its equivalent ©2011 Cengage Learning
Broker License Pass examination 200 Questions 75% correct (150 questions) After you pass: Submit application, Pay required fees Provide live-scan fingerprints Renew every 4 years ©2011 Cengage Learning
License renewal: First renewal for salesperson license requires: 3 hours of Agency 3 hours of Ethics 3 hours each of Fair Housing 3 hours of Trust Fund Handling 3 hours of Risk Management Second and all subsequent renewals: 45 hours C/E which must include: 1. Eight (8) hour survey course covering updates in Ethics, Agency, Trust Fund Handling, Risk Management, and Fair Housing ©2011 Cengage Learning
CHAPTER 15 QUESTIONS 1. To obtain a DRE salesperson license, you may miss how many questions on the salesperson exam? 2. How many minutes and how many seconds in time is allowed for each one question on the salesperson exam? 3. How many questions are you allowed to miss on the broker’s exam? 4. To spread the required hours of C/E equally over the renewal period, about how many hours would the licensee have to complete each year on a per year basis? ©2011 Cengage Learning
CHAPTER 15 Answers 1. Pass = 70% Miss 150 Q x 30% = 45 questions 2. Test time = 3 hours and 15 minutes (60 min)+(60 min)+(60 min)+(15 min) = 195 minutes / 150 questions = 1.3 minutes.3 of 60 seconds = 20 seconds 1 minute and 20 seconds 3. Pass = 75% Miss = 25% x 200 = 50 questions hours C/E every 4 years = 45 / 4 = hours per year (11-12 per year) ©2011 Cengage Learning
California DRE DEPARTMENT OF REAL ESTATE Financed by Subdivision and license fees Created by Legislature Governor appoints R. E. Commissioner who: Screens applicants, administers testing, issues licenses, investigates complaints Disciplines licensees who violate laws Regulates subdivisions Issues rules and regulations Initiates real estate education and research ©2011 Cengage Learning
No License Required for: Principals, acting on their own behalf Attorney, acting in the normal course of their business of the practice of law Attorney-in-fact, acting for another On-site resident manager Trustee, acting in a foreclosure ©2011 Cengage Learning
Fines for receipt of Illegal Commission Individual=$20,000 Corporation=$60,000 Person who pays the illegal commission = $100 ©2011 Cengage Learning
Business Opportunities Bill of Sale Financing Statement Balance sheet for a given date Profit and Loss statement for one year Bulk Sale Law requires Notice (12 days) before close of escrow to notify creditors of the inventory Goodwill Real Estate licensee can sell Business Opportunities ©2011 Cengage Learning
Balance Sheet: Assets (Accounts receivable, personal property, goodwill/patronage, inventory) - Liabilities What the business owes others (Accounts payable, debts, loans)(unremitted taxes) = Net Worth (owner’s equity, retained earnings) State Board of Equalization clearance receipt or successor’s liability Income Statement: Profit & Loss Statement (P&L): IncomeProfitability of the business - ExpensesFor a specific period of time = Profit ©2011 Cengage Learning Business Opportunity
©2011 Cengage Learning Liquor License Alcoholic Beverage and Liquor Licenses Related by Alcoholic Beverage Control Act (ABC) Types of licenses On-Sale Off-Sale Beer and Wine only All alcoholic Beverages (General license ) New general license sold by state = $6,000 1 st 5 years: Resale limited = $6,000 Cannot be transferred intercounty Bulk Sales: Involves inventory of a business.
The World of Real Estate (as of 07/06) California population = 37 million people California licensed real estate agents = Approximately 500,000 1 licensed agent for every 74 persons ©2011 Cengage Learning
Working Conditions Long working hours Competitive business Liability high for disclosure issues Frequently work nights and weekend Commission – no salary No fringe benefits Pay your own taxes NOT “Get rich quick scheme” ©2011 Cengage Learning
Benefits of real estate license Independent working conditions Good referral system and good time management equals good money Select insurance & vacation with your own earnings to fit your individual needs With small capital, can make excellent income Excellent opportunity to acquire personal investments for profit or retirement income ©2011 Cengage Learning
Is a career in Real Estate right for YOU? 1. Why are you leaving your current job? 2. How many sales per month do you need to earn your present income? 3. What vacations & holidays and fringe benefits do you need to have and how much do you need to earn to get them? 4. Are you free to work nights and weekends? 5. Do you have the stamina & energy to work sales? 6. Can your personality work peaks and valleys? 7. Can you financially afford to begin sales? 8. Can your family & relations cope with your change? ©2011 Cengage Learning
Personal Checklist 1. Analyze results of an interest inventory test 2. Complete DRE approved real estate courses 3. Check local real estate employment market 4. Select a geographic work area 5. Select offices for work for your selected area 6. Interview salespersons in several offices 7. Make an appointment with the office manager 8. Submit your resume, background, credentials 9. Make a specific list of interview questions ©2011 Cengage Learning
Review You Understanding of California Real Estate Please take the self administered 150-question review examination for the entire course. Answers are provided to enhance your learning experience. Best of Luck on YOUR real estate career! ©2011 Cengage Learning
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