Real Estate Brokerage

1
Real Estate Brokerage

• Chapter 10

2
Real Estate Brokerage

• The Real Estate Sales Process
• Listing agreements (broker/owner relations)
• Marketing the property and qualifying buyers (the
  willing and able buyer)
• Presentation and negotiations
• Contracts and closing (transfer of title)

3
Real Estate Brokerage

• Real Estate Brokers and Salespersons
• Licensing of salespeople and brokers
• Regulated through state agencies
• Transactions on ones own behalf
• Conducting transactions on behalf of others
• State license requirements
• Real estate brokerage regulation
• Suspension vs. Revocation
• Consumer protection

4
Real Estate Brokerage

• Legal Aspects of the Broker-Client Relationship
• Agency law
• Principal employer (seller principal broker)
• Agent employee (broker subagent)
• Fiduciary relationship (agent for principal)
• One, such as an agent of a principal or a company
  director, that stands in a special relation of
  trust, confidence, or responsibility in certain
  obligations to others.

5
Real Estate Brokerage

• The Role of Real Estate Brokers
• Broker representation (Typically Seller)
• Listing broker
• Obtains listing of property for sale
• Selling broker
• Actually sells the property
• Dual agent
• Single broker employed by both seller and buyer

6
Real Estate Brokerage

• Broker-Seller Relationship (Sellers Agent)
• Open listing (Multiple Brokers Seller)
• Exclusive-agency listing (1 Broker Seller)
• Exclusive-right-to-sell listing (1 Broker)
• Multiple listing (Split Comm. - ERTS)
• Net listing (Overage Commission - Illegal)
• Sales price to seller set by broker who takes any
  residual or overage amount

7
Real Estate Brokerage

• Brokers Right to a Commission
• Paid when broker either
• Sells the property, or
• Procures a ready, willing and able buyer

8
Real Estate Brokerage

• Broker-Buyer Relationship (Buyers Agent)
• Buyers representation
• Types of buyer representation agreements
• Open (commission with broker assistance only)
• Exclusive Right (commission guaranteed)
• Compensating the buyers broker
• Fee Percentage
• MLS Commission

9
Real Estate Brokerage

• Duties and Rights Under Agency Relationships
• Brokers duties
• Fraud and negligence
• False statement with intention to mislead
• Misrepresentation
• False statement but with no intention to mislead
• Selling Brokers Duties to Buyers
• Disclosure of problems with the property
• Safeguarding of Earnest Money

10
Real Estate Brokerage

• Fair Housing Laws
• Prohibit discrimination based on sex, race,
  color, religion, national origin, disabilities,
  or familial status
• Steering
• Selectively showing properties to prospective
  buyers based on their racial or ethnic background
• Blockbusting
• Using prejudice to depress prices in a
  neighborhood as minorities migrate in.

11
Real Estate Brokerage

• Methods of Agency Termination
• Sale of the listed property
• Time limit expires
• Mutual agreement
• Breach of duties
• Loss of contractual capacity (Death/Illness)
• Improvements are destroyed
• Property is taken by government under power of
  eminent domain

12
Real Estate Brokerage

• Types of Brokerage Firms
• Franchises (Coldwell Banker, Century 21)
• Pay a fee of gross transactions to Franchiser
• Desk Fee Arrangements
• Paid Employment (pay fee to occupy office)
• Office Resources
• Shared Commission
• MLS Provides a networking and marketing
  advantage

13
Real Estate Brokerage

• Compensation of Brokers
• 6-7 SFR
• 3-5 Commercial
• 7- 10 Land
• Salesman gets of Broker Comm.