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Real Estate > The Basics > Flashcards

The Basics Flashcards

1
Q

Why do we need licenses?

A

To protect the public.

It insures you have a specific kind of knowledge.

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2
Q

When is a license required?

A

Any time you represent someone else in a real estate transaction & get paid for it (or plan to be paid).

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3
Q

What does the MA Board of Registration of Real Estate Brokers & Salespersons do?

A

They enforce licensing laws, issue licenses, handle license renewals, suspension, revocation and reinstatements.

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4
Q

What does “The Board of Registration” consist of?

A

2 unlicensed persons & 3 Brokers with 7+ years experience (one of these people is appointed as a chairmen).
They are appointed by the governor, they meet at least 4 times a year, they serve 5 year terms, and the positions are unpaid.

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5
Q

What is “The Board” a part of?

A

Part of the Division of Professional Licenses (DPL).

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6
Q

Reciprocity

A

Can transfer licenses to other states. (education wise; you still need to apply to that states board and you may need to pay a fee)

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7
Q

Salesperson licensing requirements

A 
Must be at least 18 years old.
Take a 40 hr. pre-licensing course. 
Pass the Exam.
Pay licensing fee.
Affiliate with a broker (work under a broker of record).
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8
Q

What can a salesperson not do?

A

May NOT accept direct direct client payments/listings.

Cannot handle escrow accounts.

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9
Q

Escrow

A

Holding account for clients money; things like deposits.

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10
Q

Broker licensing requirements

A

Must have a minimum of 3 years salesperson experience.
Must have worked a minimum of 25 hrs./wk.
Take a 40 hr. pre-licensing course.
Pass state exam.
Pay licensing fee.
Must be bonded for 5K.

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11
Q

What is the $5K bond for Brokers for?

A

It is a piece of paper (like a cert.) that says you can cash this bond at any time & it’s worth $5k to cover any mistakes you make w/ client money.

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12
Q

What can a Broker do that a Salesperson cannot do?

A

A broker can handle client money, take listings, and work independently.

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13
Q

Associate Broker

A

These people have a brokers license, but continue to operate under an employing broker. They have the sale authority of a salesperson. They cannot take listings or client money. They must STILL be bonded for $5K.

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14
Q

“REALTORS”

A

This is not a license designation, it’s a membership in the National Association of Realtors.
You pay an annual fee to join the local chapter and pledge to a code of ethics.
examples: Massachusetts Association of Realtors (MAR), Greater Boston Association of Realtors (GBAR)

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15
Q

Does one need to be in the “Realtors” group?

A

Not necessarily. If you work for a broker who is part of the group, you as a salesperson will need to be. If the broker is not in the group, then no one in the brokerage will be.

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16
Q

Who can join the “Realtors” group?

A

Anyone in the Real Estate world. (brokers, salespersons, appraisers, builders, investors, etc.)

17
Q

What is the penalty for a brokerage that is not part of the “Realtors” group?

A

They will pay a $475 fine per agent in their brokerage.

18
Q

What are the type of agents involved in a transaction?

A

The buyer’s agent & the seller’s agent.

19
Q

What is the process from the POV of the seller agent?

A
  1. Seller consultation (listing agreement, discuss timeline, price, etc.)
  2. Prep the listing (might include staging, renovation, decluttering, photo/video)
  3. List the property (List on MLS within 24 hrs. other sites will be syndicates to the MLS listing)
  4. Advertise (social media, open houses, virtual tours, etc.)
  5. Qualify & Show (find a buyer (either buyers agent or direct buyer. be mindful of questions to ask the buyer; are you preapproved, do you have a timeline, payment plan, disclose any quirks about the property)
  6. Offer (+offer deposit) (turns into a valid contract; discuss closing date, if there are any contingencies)
    - -about a 2 week time in between here for agent to do due diligence–
  7. Purchase & Sale (real estate contract to purchase the property, pick closing date, promises & responsibilities of both seller and buyer must be met. Listed as UNDER CONTRACT or CTG (CONTINGENT. must do title search, appraisal if financing, etc.)
  8. Closing (brokerage gets paid… broker pays salesperson)
20
Q

1099

A 
Independent contractor (self-employed)
Only gets paid when a sale occurs-commission only (no taxes taken out)
21
Q

Sherman Anti Trust Act

A

No set standard for commission. The commissions are always negotiable.

22
Q

How is a Brokerage paid?

A

They are paid by the seller. The seller and the agent work together to decide what commissions the seller agrees to. When a commission is agreed on, the sell agent will ask if the client is okay with them splitting the commission with the buyers agent.

23
Q

Tax Implications

A

Quarterly tax payments (set up by an accountant)

24
Q

General Liability Insurance

A

Coverage for personal or property damage that might occur at the office or at a showing.
“Insurance that protects property against people.”

25
Q

Professional Liability insurance

A

Errors & Omissions (E&O)
Protects against mistakes made by broker/salesperson during a transaction.
“Insurance that protects people against other people.”

26
Q

How many brokers can a salesperson work for at a time in MA?

A

1

27
Q

What is the client/broker/salesperson relationship dynamic?

A

The client is the principle to the Broker. The Broker is the Principal to the Sales agent.
The broker is a special agent, the salesperson is the subagent.
The client and the salesperson have an indirect relationship. The broker has a direct relationship with both the client and the salesperson.

28
Q

The primary difference between a salesperson and a broker is…

A

Only brokers can work for themselves.

29
Q

Who issues real estate licenses?

A

The Board of Registration.

30
Q

The special agent in a real estate transaction is the…

A

Broker

31
Q

To renew your real estate license you should…

A

Send a written request to the board (if the license has not expired you only need to pay a fee every two years and so 12 hrs. of continuing education.

32
Q

The offer directly leads to the creation of…

A

The purchase and sale agreement.

Real Estate (19 decks)

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