Real Estate Basics-Real Estate Brokerage

Posted by admin on August 21, 2010 under Real Estate License Basics | Be the First to Comment

For this installment of the Real Estate Basics series we will review real estate brokerage and the basics of what you need to know to get your real estate license.

The real estate brokerage business is the facilitation, listing, marketing and managing of information for the procurement of buyers, sellers, tenants or leased property for clients. This is accomplished with the help of other brokers and the use of a network of broker shared listing known as the Multiple Listing Service.

Real estate can be brokered legally by sole proprietors, joint ventures, limited partnerships, general partnerships, or for profit corporations. Not for profit corporations, cooperative associations and business trusts are not permitted to broker real estate. There are many types of brokerage organizations. There are limited and full service agencies, independents and franchises as well as brokerage agencies by client type, property type, or transaction type.

The relationship between brokers and salespersons is important to understand and will be covered in your real estate courses. The real estate broker’s role is to negotiate an agreement for the sale, purchase, rent, lease, or otherwise exchange interest in real property for a fee or a commission. Real estate brokers are also responsible for supervising all their salespersons activities as well as accepting and keeping all of the funds being held for the transaction in an escrow account. Salespersons must be affiliated with a licensed real estate broker, either as an employee or as an independent contractor. The real estate salesperson role is much the same as the broker’s role except that they cannot negotiate the final terms of an agreement and they are not permitted to hold or accept escrow funds.

The salesperson and the broker have certain obligations to each other. The salesperson must obtain and sell listings for the real estate broker, abide by all regulations and policies as per their employment agreement, and always promote ethics and protect the broker’s reputation. The broker’s responsibility to the salesperson is to provide the policies and an employment agreement to the salesperson. They must also provide salespersons necessary information, office support, training and compensation while upholding ethical standards.

Operating a real estate brokerage requires more than obtaining and marketing property listings and managing information about the market, clients, and properties; real estate brokerages must follow all advertising regulations and Anti-Trust Laws. Real estate brokers are responsible for the content of all advertising material. Every advertisement must contain the broker’s identification information. Blind ads and misleading ads are prohibited. Antitrust Laws like the Sherman Act and the Clayton Act are in place to protect against unfair business practices, monopolies, and trade restraints.

Real estate brokerage is a large subject and you will need to understand it to pass the real estate license exam. In this installment of Real Estate Basics we have only summarized the general parameters of real estate brokerage in the hopes of making the information easier to understand. Your real estate courses will cover the subject more in depth for you.