1. Chapter 5 Slide 1 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 Chapter 5: REAL ESTATE BROKERAGE Broker Salesperson Leasing Agent

2. Chapter 5 Slide 2 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 Responsible for the brokerage actives Responsible for the actions of the sales associates Owns all listings & buyers BROKER

3. Chapter 5 Slide 3 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 Works under a broker Performs only on behalf of the broker in the name of the broker at the discretion of the broker Paid only by their sponsoring broker SALESPERSON

4. Chapter 5 Slide 4 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 LEASING AGENT Leasing Agent" employed by a real estate broker to engage in the leasing of residential real estate only

5. Chapter 5 Slide 5 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 BROKER An individual, partnership, limited liability company, corporation, or registered limited liability partnership other than a real estate salesperson or leasing agent Who for another and for Compensation, or with the intention or expectation of receiving compensation, either directly or indirectly (License Act of 2000 Page 2) Definition

6. Chapter 5 Slide 6 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 BROKER 1. Sells, exchanges, purchases, rents, or leases real estate. 2. Offers to sell, exchange, purchase, rent, or lease real estate. 3. Negotiates, offers, attempts, or agrees to negotiate the sale, exchange, purchase, rental, or leasing of real estate. 4. Lists, offers, attempts, or agrees to list real estate for sale, lease, or exchange. 5. Buys, sells, offers to buy or sell, or otherwise deals in options on real estate or improvements thereon. 6. Supervises the collection, offer, attempt, or agreement to collect rent for the use of real estate.

7. Chapter 5 Slide 7 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 BROKER 7. 7. Advertises or represents himself or herself as being engaged in the business of buying, selling, exchanging, renting, or leasing real estate. 8. 8. Assists or directs in procuring or referring of prospects, intended to result in the sale, exchange, lease, or rental of real estate. 9. 9. Assists or directs in the negotiation of any transaction intended to result in the sale, exchange, lease, or rental of real estate. 10. 10. Opens real estate to the public for marketing purposes. 11. 11. Sells, leases, or offers for sale or lease real estate at auction.

8. Chapter 5 Slide 8 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 BROKER-SALESPERSON RELATIONSHIP Salesperson can represent only one broker at a time (License ACT Sec 10-20 Page 17) All compensation to that salesperson must flow from sponsoring broker (Page 63 & License ACT Sec 10-5 Page 16) Salesperson must have a written agreement with broker establishing their relationship (License ACT Sec 10-20 Page 17)

9. Chapter 5 Slide 9 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 INDEPENDENT CONTRACTOR (Page 62) Must have a current real estate license Must have a written contract with the broker At least 90 percent of the individual’s income as a licensee must be based on sales production and not on the number of hours worked

10. Chapter 5 Slide 10 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 Do not work employee determined hours Do not receive scheduled salaries Must be a self motivator Must have total control over how and when to do their work Paid irregularly Cannot be required to attend office meetings INDEPENDENT CONTRACTOR (Page 62)

11. Chapter 5 Slide 11 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 PROCURING CAUSE Uninterrupted chain of events Without abandonment or estrangement Which leads to the sale of property

12. Chapter 5 Slide 12 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 BROKER’S COMPENSATION Broker’s Commission is considered earned when the broker produces a buyer Ready  Willing  Able

13. Chapter 5 Slide 13 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 IN ILLINOIS (Page 64) It is illegal for a sponsoring broker to pay a commission to anyone other than: A salesperson licensed under that same sponsoring broker; or Another firm’s sponsoring broker (Cooperating broker or Coop)

14. Chapter 5 Slide 14 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 BROKER’S COMPENSATION The broker’s compensation is specified in the contract with the principal. The amount of a broker’s commission is negotiable in every case. (Sherman Anti-trust Act) A broker may, however, set the minimum rate acceptable for that broker’s firm

15. Chapter 5 Slide 15 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 You must have a real estate license You must show evidence of being hired The amount of commission and time of payment must be stated You must be the procuring cause (Page 63) TO COLLECT A COMMISSION

16. Chapter 5 Slide 16 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 BROKER EARNS A COMMISSION (Page 64) Seller has a change of heart - refuses to sell Has a spouse who refuses to sign the deed prior to or at the closing Has a title with uncorrected defects

17. Chapter 5 Slide 17 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 Commits fraud with regards to the transaction Is unable to deliver possession as promised Cancels the sale by mutual agreement with the buyer BROKER EARNS A COMMISSION

18. Chapter 5 Slide 18 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 BROKER COMPENSATION MATH

19. Chapter 5 Slide 19 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 Licensed PERSONAL ASSISTANTS (Page 67) Personal assistants MUST have a real estate license to have contact with the consumer Must be licensed to the same broker as the salesperson they are working for Must have a written contract with the sponsoring broker Can only be compensated by the sponsoring broker

20. Chapter 5 Slide 20 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 UN-LICENSED PERSONAL ASSISTANTS Cannot have contact with the consumer Can take messages Can handle all non-consumer related administrative tasks Can be paid directly by the salesperson they support Must be treated as an employee

21. Chapter 5 Slide 21 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 ANTITRUST LAWS (Page 72) Sherman Anti-Trust Act - was designed to encourage a competitive market. Price Fixing Group boycotting Allocation of Customers or Markets Tie-In Agreements

22. Chapter 5 Slide 22 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 Uniform Electronic Transactions Act (UETA) 1.A contract cannot be denied its legal effect 2.A record or signature cannot be denied its legal effect 3.If State law requires a signature is required, an electronic signature will be sufficient 4.If state law requires an written record, an electronic record will be sufficient Electronic Signatures in Global & National Commerce ACT (E-Sign) Make contracts & signatures legally enforceable ELECTRONIC CONTRACTING (Page 69)

23. Chapter 5 Slide 23 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 LEGISLATION Do Not Call 18 months following business 3 months following inquiry

24. Chapter 5 Slide 24 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 Can Spam False or misleading headers are banned Deceptive subject lines are banned Recipients must have an “Opt-out” provision Commercial emails must be identified as an advertisement and include the sender’s physical address LEGISLATION

25. Chapter 5 Slide 25 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 LEGISLATION Junk Fax Act Licensee cannot send out a fax without the prior written consent of the recipient Allows for an “established business relationship” Requires an “opt-out” provision Fax numbers must be acquired either by written or oral consent from the intended recepient