Chapter 8 Real Estate Brokerage

1
Chapter 8Real Estate Brokerage
The real estate sales process, agency theory,
licensing, types of brokerage firms and
compensation.
2
The Real Estate Process

• Listing agreements
• Marketing the property and qualifying the buyers
• Presentation and negotiations
• Contracts and closing

3
Real Estate Brokers and Salespersons

• Licensing of salespeople and brokers
• Transactions on ones own behalf
• Conducting transactions on behalf of others
• State license requirements
• Real estate brokerage regulation
• Consumer protection

4
Legal Aspects of the Broker-Client Relationship

• Agency Law
• Principal
• Agent
• Subagent

5
The Role of Real Estate Brokers

• Broker Representation
• Listing Broker
• Selling Broker
• Buyers Agent
• Dual Agent
• Transaction Broker

6
The Creation of Agency Relationships

• Broker-Seller Relationship (Sellers Agent)
• Open Listing
• Exclusive-Agency Listing
• Exclusive-Right-To-Sell Listing
• Net Listing
• Brokers Right to a Commission
• Broker-Buyer Relationship (Buyers Agent)
• Buyers Representation
• Types of Buyer Representation Agreements
• Compensating the Buyers Broker

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Duties and Rights Under Agency Relationships

• Brokers Duties
• Fraud and Negligence
• Misrepresentation
• Sellers Agents duties to the seller
• Fair Housing Laws
• Steering
• Blockbusting
• Buyers Agents duties to buyers
• Buyers Agents duties to sellers
• Disclosure of agency relationship

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Termination of Agency Relationships

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

9
Types of Brokerage Firms

• The one-office firm
• Property type specialization
• Franchises
• Desk fee arrangements
• Multiple Listing Services (MLS)

10
Broker and Salesperson Compensation

• Percentage Commissions
• Anti-Trust Violations
• Compensation for Salespersons

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TYPICAL COMMISSION SPLIT
Sale of Property 100,000
Commission 6.0 6,000
Listing Broker Firm 50 of Commission 3,000
Selling Broker Firm 50 of Commission 3,000
Listing Salesperson 50 of Firms
Commission 1,500
Selling Salesperson 50 of Firms
Commission 1,500
This percentage can vary from 50 percent to 90
percent depending on such factors as length of
time the salesperson has been with the firm and
whether he or she is an officer of the firm.