The Basics

Question 1

Licenses exist to..

Answer 1

protect consumers through a form of police power. (the right of gov yo enact laws to protect public)

Question 2

Must be licensed in order to..

Answer 2

receive a fee/expect to receive a fee for real estate advertising:

1. selling
2. renting
3. leasing
4. negotiating
5. exchanging
6. purchasing
7. dealing

Question 3

Who creates the licensure laws?

Answer 3

State Legislature

Question 4

Conflict between Fed and State Laws

Answer 4

Fed laws trump state

Question 5

Salesperson

Answer 5

1. Must affiliate with broker to practice RE

2. May not accept direct client payments

Question 6

Broker

Answer 6

1. can do everything a salesperson can do
2. can operate independently
3. can accept payments directly from client
4. can handle escrow funds (client deposits)

Question 7

Employing Broker vs Associate Broker

Answer 7

employing broker (broker):  have all authority
associate broker (broker associate): has broker's license but chooses to work under another broker. Cannot handle escrow

Question 8

Relators License

Answer 8

a membership in a trade association

Question 9

Opening a Realtor’s Office

Answer 9

all agents must be associated to a local realtor association. assessment would occur if they aren’t following this

Question 10

Listing Agent

Answer 10

hired by seller. best interest in selling property for the most money in the shortest timeframe.

Question 11

Sell/Purchase Process

Answer 11

1. prep property for sale
2. Advertise the property (MLS, online, newspaper)
3. Interested buyer will contact the seller’s agent or get a buyers agent. showing will conduct
4. ask buyers estimated timeframe, pre-approved, what they are looking for in home
5. Buyer submits offer, seller can accept
6. P&S is drafted and signed
7. Once T&Cs are met from P&S (secure financing, inspection etc.), closing takes place
8. brokerage and agents will receive commission

Question 12

Principal

Answer 12

the client who hires the agent

Question 13

Special Agent

Answer 13

the broker who is hired and paid by the principal

Question 14

Subagent

Answer 14

the broker’s agent (salesperson or associate broker) who is paid by broker

Question 15

1099

Answer 15

independent contractor who is paid by job or commission. taxes withheld from pay and considered self employed.

may also take advantage of tax write-off (tax deduction).

Question 16

W2

Answer 16

salaried or paid hourly. Employer control how/what work is done.

Question 17

Tax Deductions (1099 employees)

Answer 17

must keep receipts/records. reduce your taxable income

Question 18

Professional Liability Insurance

Answer 18

errors and omissions insurance. protection against human mistakes brokers and salespersons make.

buy on own

Question 19

General Liability Insurance

Answer 19

coverage for personal or property damage that may occur at showing or brokerage

usually covered by brokerage