© OnCourse Learning Chapter 19 : Licensing Laws and Professional Affiliation

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Chapter 19: Licensing Laws and Professional Affiliation

Does the public have a vested interest in seeing that real estate agents have the qualifications of honesty, truthfulness, good reputation, and real estate knowledge?

It was this concern that brought about real estate licensing laws as we know them today.

Until 1917, no state required real estate agents to be licensed.

RATIONALE FOR LICENSING

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A person who, for compensation or promise of compensation, lists or offers to list, sells or offers to sell, buy or offers to buy, negotiates or offers to negotiate a sale, purchase or option to purchase, exchange, auction, lease, or rental of real estate, or any interest in real estate

Must hold a valid real estate license.

LICENSEE

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Real Estate BrokerA person licensed to act independently in conducting real estate brokerage business.

Real Estate SalespersonA person employed by a broker.

LICENSE TYPES

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REAL ESTATE REGULATION

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http://www.arello.orgSee Figure 19.1 page 347

STATE LICENSE REQUIREMENTS

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Training – complement, enhance, and encourage your personal development.

Compensation – usually a percentage of earned commissions.

Support – what services do they offer.Franchise offi ces

BROKER AFF IL IAT ION

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Paid only if a sale produces a commission and is responsible for income taxes and social security.

INDEPENDENT CONTRACTOR

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Registered trade nameMember of NAR and not synonymous

with real estate agentCode of ethics first adopted in 1913GRI designation by taking sponsored

education courses by NAR

REALTOR®

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http://www.realtor.orgSee Figure 19.2 on page 360

NAR CODE OF ETHICS

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The National Association of Real Estate Brokers (NAREB)

Promote high standards of service and conduct & to protect the public against unethical, improper, or fraudulent real estate practices.

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REALTIST

100% commission Broker Independent contractor License revocation License suspension Licensee

Principal broker Real estate commission REALTOR®

Recovery fund Sales associate Salesperson

Key Terms

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