Real Estate Practice Unit 1

Front 1

Residential brokerage

Back 1

The business of helping homeowners sell and homebuyers purchase homes.

Front 2

Mortgage loan agent

Back 2

The business of helping borrowers qualify for and get loans to purchase homes

Front 3

Prospecting

Back 3

The activities a salesperson performs in order to seek out potential clients.

Front 4

Listing agreement

Back 4

A bilateral contract between the property owner and the broker to place properties for sale with the broker.

Front 5

Escrow

Back 5

The period of time when all parties are held accountable for the terms of the agreement such as disclosures, financing, property inspection, title search, etc.

Front 6

Multiple Listing Service (MLS)

Back 6

A cooperative listing service conducted by a group of brokers, usually members of a real estate association. Salespeople and brokers submit listings to a central bureau.

Front 7

Real Estate Professional Assistant (REPA)

Back 7

A quick-start two-day certificate course that introduces you to the business side of real estate. The course covers such topics as listing and sales forms, MLS input forms, types of agency, mandatory disclosures, marketing concepts, and professional ethics.

Front 8

Large independent firms

Back 8

Usually owned by private parties or partnerships, and may have many offices in one area. These companies usually operate like franchised companies and offer management opportunities as well.

Front 9

Franchise

Back 9

A business organization (franchisor) that enters into a contract with other businesses (franchisees) for a fee in order to operate under the franchisor’s name and guidance.

Front 10

Agency Relationships

Back 10

Agent Principal Third Party
(broker) (Client) (Customer)

Listing Agent Seller Buyer
Buyer's Agent Buyer Seller
Selling Agent Seller or Buyer Buyer or Seller








Buyer
Seller
Buyer or Seller

Front 11

Real Estate Broker

Back 11

*Person holding a broker license and permitted by law to employ those holding either a salesperson or a broker license
*Agent of the principal - may negotiate for other people
*Acts as an independent contractor for income tax, workers’ compensation, and unemployment insurance purposes

Front 12

Real Estate Salesperson

Back 12

*Person holding a salesperson license and employed by a real estate broker, for pay, to perform real estate activities
*Agent of the broker—not the buyer or the seller
*Employed by the broker, under real estate license law
Is self-employed for income tax purposes

Front 13

Tests Used to Determine Statutory Nonemployee Status

Back 13

1. Must have a valid real estate license. The California Bureau of Real Estate must issue the license.

2. Must be compensated based on the number of sales closed and commissions earned, not based on the number of hours worked.

3. Both federal and California tax purposes, there must be a written contract between the employing broker and the salesperson specifying that the salesperson will not be treated as an employee for federal tax purposes.

Front 14

Employment Agreement

Back 14

The real estate law requires that every broker have a written employment agreement with each of his or her salespeople. Both parties must sign and date the agreement and if employment is terminated, the broker must keep copies of it for three years after the date of termination.

Front 15

Commission Disputes

Back 15

he Real Estate Commissioner does not have the authority to resolve the dispute. Any commission dispute between brokers or salespeople is a civil matter, and must be resolved in court.

Front 16

Workers’ compensation insurance

Back 16

A broker must provide workers’ compensation insurance to all salespeople as well as any non-licensee employees of the firm. The Employment Development Department enforces compliance with workers’ compensation insurance requirements. Failure to provide workers’ compensation coverage for their real estate salespeople could result in fines up to $100,000.

Front 17

Coordinators

Back 17

Keep the files of each transaction or listing current and active. These specialized areas include advertising, transactions, and prospecting.

Front 18

Advertising coordinator

Back 18

Makes sure every listing gets its share of advertising time and creates flyers and brochures for team listings.

Front 19

Transaction coordinator

Back 19

Coordinator to whom salespeople give the paperwork for a transaction just after a buyer and seller sign the offer to purchase.

Front 20

Listing coordinator

Back 20

Manages all required paperwork for listings. Duties may include preparing a pre-listing package and comparative market analysis (CMA) for each seller, communicating with sellers regarding the marketing of their property, following-up with salespeople who show the property, arranging office and MLS previews, and completing any task required to take the listing from potential sale to closed transaction.

Front 21

Escrow coordinator

Back 21

Manages all earnest money deposits, inspections, disclosures, financing, title, and escrow issues. During the escrow process, anything that needs to be resolved prior to closing is the responsibility of the escrow coordinator.

Front 22

Prospecting coordinator

Back 22

On the telephone seeking new business at least six hours a day, to generate leads and set up appointments for the lead listing salesperson.