1. Ch 8 Real Estate Brokerage

2. 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

3. I. Real Estate Brokers vs. Sales Associates
A real estate broker is an who brings together , assists in negotiating agreements between them, executes their orders, and receives a in compensation for services rendered.
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 .

4. 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

5. 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
the broker provides some services for a fee

6. 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

7. III. Regulation of the Real Estate Profession
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:

8. When is a Real Estate license necessary in Florida?
Advertising real estate services
Representing buyers
Representing sellers
Arranging rentals (leases) or providing rental (leasing) information
Auctioning
Exchange

9. When is a license not required in Florida?
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

10. Florida Sales Associate License Requirements
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)

11. Florida Broker License Requirements
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

12. Other Florida Licensing Laws
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

13. IV. Legal Aspects of Agency- Relationship
“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.

14. Single Agent’s Duties to Principal in Florida
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

15. Fraud vs. Misrepresentation
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

16. Termination of Agency Relationships
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

17. V. Other Brokerage Issues
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)

18. National Association of Realtors
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.