The Basics Flashcards
Why do we have licenses?
Anyone who advertises and/or holds themselves out as engaged in the business of selling, renting, leasing, negotiating, exchanging, purchasing, and dealing in real estate or options for real estate for a fee, has to be licensed.
Who governs licensure?
Board of Registration of Real Estate Brokers & Salespersons.
- Issues licenses and oversees administration and enforcement.
- Established in 1960
- 5 members - 3 brokers w/ at least 7 yrs of experience, 2 w/o licenses (represent public), 1 has to be appointed as chair
- serve 5-yr, unpaid terms and meet minimum of 4x/year
- 3 members have to be present and minutes/records are public
- 1000 Washington Street, Boston, MA
Salesperson License
- Must affiliate with a broker to practice real estate.
- May not accept direct client payments.
- Must be 18 years old, take a 40-hour class, pass the state exam, and pay a fee (currently $103-$150).
Broker’s License
• Can do everything that a real estate salesperson can do, plus they may operate independently, accept direct client payments, and handle escrow funds (client deposits).
o Employing brokers or brokers of record typically have this authority
o Associate brokers or broker associates are those with broker’s licenses who choose to work under another broker. They are not permitted to handle escrow accounts.
• Must have 3 years of experience as a salesperson, take an additional 40-hour class, pass an additional state exam, be bonded for $5000, and pay a fee (currently $142-$200).
REALTORs and the NAR
- Membership in a trade association
- NAR: National Association of REALTORs
Principal, Special Agent, and Subagent
Client = Principal: hires an agent in a RE transaction
Broker = Special Agent: hired and paid directly by principal
Salesperson or Associate Broker = Subagent (agent’s agent)
-salesperson would be client’s subagent and broker’s agent.
What are the 2 types of insurance that brokerages and their agents often carry?
- Professional Liability Insurance (“errors and omissions insurance”): provides protection against human mistakes made while providing RE services. Agents should purchase this for themselves.
- General Liability Insurance: coverage for personal or property damage that might occur at brokerage or during showings. Usually purchased by brokerage.
