Chapter 8 Real Estate Brokerage

1. Chapter 8Real 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)

2. Chapter 8Real Estate Brokerage • Real Estate Brokers and Salespersons • Licensing of salespeople and brokers • Regulated through state agencies • Transactions on one’s own behalf • Conducting transactions on behalf of others • State license requirements • Real estate brokerage regulation • Suspension vs. Revocation • Consumer protection

3. Chapter 8Real Estate Brokerage • Legal Aspects of the Broker-Client Relationship • Agency law • Principal – employer (seller & principal broker) • Agent – employee (broker & subagent) • Fiduciary relationship (principal for agent)

4. Chapter 8Real Estate Brokerage • The Role of Real Estate Brokers • Broker representation • Listing broker • Obtains listing of property for sale • Selling broker • Actually sells the property • Dual agent • Single broker employed by both seller and buyer

5. Chapter 8Real Estate Brokerage • Broker-Seller Relationship (Seller’s 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

6. Chapter 8Real Estate Brokerage • Broker’s Right to a Commission • Paid when broker either • Sells the property, or • Procures a ready, willing and able buyer

7. Chapter 8Real Estate Brokerage • Broker-Buyer Relationship (Buyer’s Agent) • Buyer’s representation • Types of buyer representation agreements • Open (commission with broker assistance only) • Exclusive Right (commission guaranteed) • Compensating the buyer’s broker • Fee + Percentage • MLS Commission

8. Chapter 8Real Estate Brokerage • Duties and Rights Under Agency Relationships • Broker’s duties • Fraud and negligence • False statement with intention to mislead • Misrepresentation • False statement but with no intention to mislead

9. Chapter 8Real 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

10. Chapter 8Real 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

11. Chapter 8Real 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

12. Chapter 8Real Estate Brokerage • Compensation of Brokers • 6-7% SFR • 3%-5% Commercial • 7- 10% Land • Salesman gets % of Broker Comm.