Chapter 5 Slide 1 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 Chapter 5: REAL ESTATE BROKERAGE Broker Salesperson Leasing Agent

Chapter 5

Slide 1

Copyright – David A. McGowan

All rights reserved.Revised 3-15-09

Chapter 5:

REAL ESTATE BROKERAGE

Broker

Salesperson

Leasing Agent

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Responsible for the brokerage actives

Responsible for the actions of the sales associates

Owns all listings & buyers

BROKER

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Works under a broker

Performs only on behalf of the broker in the name of the broker at the discretion of the broker

Paid only by their sponsoring broker

SALESPERSON

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LEASING AGENT

Leasing Agent" employed by a real estate broker to engage in the leasing of residential real estate only

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BROKERAn individual, partnership, limited liability

company, corporation, or registered limited liability partnership other than a real estate

salesperson or leasing agent

Who for another and for Compensation,

or with the intention or expectation of receiving compensation, either directly or

indirectly(License Act of 2000 Page 2)

Definition

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BROKER1.1. Sells, exchanges, purchases, rents, or leases real estate.Sells, exchanges, purchases, rents, or leases real estate.

2.2. Offers to sell, exchange, purchase, rent, or lease real Offers to sell, exchange, purchase, rent, or lease real estate.estate.

3.3. Negotiates, offers, attempts, or agrees to negotiate the Negotiates, offers, attempts, or agrees to negotiate the sale, exchange, purchase, rental, or leasing of real estate.sale, exchange, purchase, rental, or leasing of real estate.

4.4. Lists, offers, attempts, or agrees to list real estate for Lists, offers, attempts, or agrees to list real estate for sale, lease, or exchange.sale, lease, or exchange.

5.5. Buys, sells, offers to buy or sell, or otherwise deals in Buys, sells, offers to buy or sell, or otherwise deals in options on real estate or improvements thereon.options on real estate or improvements thereon.

6.6. Supervises the collection, offer, attempt, or agreement to Supervises the collection, offer, attempt, or agreement to collect rent for the use of real estate.collect rent for the use of real estate.

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BROKER7. Advertises or represents himself or herself as being

engaged in the business of buying, selling, exchanging, renting, or leasing real estate.

8. Assists or directs in procuring or referring of prospects, intended to result in the sale, exchange, lease, or rental of real estate.

9. Assists or directs in the negotiation of any transaction intended to result in the sale, exchange, lease, or rental of real estate.

10. Opens real estate to the public for marketing purposes.

11. Sells, leases, or offers for sale or lease real estate at auction.

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BROKER-SALESPERSON

RELATIONSHIP

Salesperson can represent only one broker at a time (License ACT Sec 10-20 Page 17)

All compensation to that salesperson must flow from sponsoring broker (Page 63 & License ACT Sec 10-5 Page 16)

Salesperson must have a written agreement with broker establishing their relationship (License ACT Sec 10-20 Page 17)

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INDEPENDENT CONTRACTOR (Page 62)

Must have a current real estate license

Must have a written contract with the broker

At least 90 percent of the individual’s income as a licensee must be based on sales production and not on the number of hours worked

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Do not work employee determined hours

Do not receive scheduled salaries

Must be a self motivator

Must have total control over how and when to do their work

Paid irregularly

Cannot be required to attend office meetings

INDEPENDENT CONTRACTOR (Page 62)

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PROCURING CAUSE

Uninterrupted chain of events

Without abandonment or estrangement

Which leads to the sale of property

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BROKER’S COMPENSATION

Broker’s Commission is considered earned when the broker produces a

buyer

Ready Willing Able

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IN ILLINOIS (Page 64)

It is illegal for a sponsoring broker to pay a commission to anyone other than:

A salesperson licensed under that same sponsoring broker;

or

Another firm’s sponsoring broker (Cooperating broker or Coop)

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BROKER’S COMPENSATION

The broker’s compensation is specified in the contract with the principal.

The amount of a broker’s commission is negotiable in every case. (Sherman Anti-trust

Act)

A broker may, however, set the minimum rate acceptable for that broker’s firm

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You must have a real estate license

You must show evidence of being hired

The amount of commission and time of payment must be stated

You must be the procuring cause

(Page 63)

TO COLLECT A COMMISSION

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BROKER EARNS A COMMISSION(Page 64)

Seller has a change of heart - refuses to sell

Has a spouse who refuses to sign the deed prior to or at the closing

Has a title with uncorrected defects

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Commits fraud with regards to the transaction

Is unable to deliver possession as promised

Cancels the sale by mutual agreement with the buyer

BROKER EARNS A COMMISSION

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BROKER COMPENSATION MATH

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Licensed

PERSONAL ASSISTANTS (Page 67)

Personal assistants MUST have a real estate license to have contact with the consumer

Must be licensed to the same broker as the salesperson they are working for

Must have a written contract with the sponsoring broker

Can only be compensated by the sponsoring broker

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UN-LICENSED

PERSONAL ASSISTANTS

Cannot have contact with the consumer

Can take messages

Can handle all non-consumer related administrative tasks

Can be paid directly by the salesperson they support

Must be treated as an employee

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ANTITRUST LAWS (Page 72)

Sherman Anti-Trust Act - was designed to encourage a competitive market.

Price Fixing

Group boycotting

Allocation of Customers or Markets

Tie-In Agreements

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Uniform Electronic Transactions Act (UETA)

1. A contract cannot be denied its legal effect

2. A record or signature cannot be denied its legal effect

3. If State law requires a signature is required, an electronic signature will be sufficient

4. If state law requires an written record, an electronic record will be sufficient

Electronic Signatures in Global & National Commerce ACT (E-Sign)

Make contracts & signatures legally enforceable

ELECTRONIC CONTRACTING (Page 69)

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LEGISLATION

Do Not Call

18 months following business

3 months following inquiry

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Can Spam

False or misleading headers are banned

Deceptive subject lines are banned

Recipients must have an “Opt-out” provision

Commercial emails must be identified as an advertisement and include the sender’s physical address

LEGISLATION

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LEGISLATION

Junk Fax Act

Licensee cannot send out a fax without the prior written consent of the recipient

Allows for an “established business relationship”

Requires an “opt-out” provision

Fax numbers must be acquired either by written or oral consent from the intended recepient

Documents

Chapter 5 Slide 1 Copyright – David A. McGowan All rights reserved. Revised 3-15-09 Chapter 5: REAL ESTATE BROKERAGE Broker Salesperson Leasing Agent