-
Brokerage
- Business of bringing 2 entities together
- May be a sole proprietorship , a corporations, or a partnership with another real estate broker
- Office may be independent or part of a regional or national franchise.
- May be a singe office or multiple branches.
- May be located in high rises, suburban shopping center or their homes
- May specialize in one kind of transaction or service or it may offer a variety of services
-
Multiple Listing ervice MLS
- Coop of 2 brokers selling one property
- Expedite sales by increasing a single property's exposure to more buyers
- Both brokers represented the seller's interst
-
Broker-Salesperson Relationship
- Licensed to preform real estate activities on behalf of the broker
- Broker is still responsible for all transactions performed by the licensee
-
Broker's Compensation
- Must be specified in the contract with the consumer
- May be in the form of a commission or the broker's fee(computed as a percentage of the total sale price), a flat fee for service or an hourly rate
- THE BROKER AND THE CLIENT MUST AGREE ON A RATE BEFORE THE AGENCY RELATIONSHIP IS ESTABLISHED
- Payable when the sale is consummated by the delivery of the seller's deed.
-
No Specific Time for the payment of the Broker's commission, the commission is usually earned when:
- A completed sales contract has been executed by a ready, willing and able buyer
- The contract has been accepted and executed by the seller and
- Copies of the contract of in possession of all parties
-
Requirements for Sales Commission Elegibility
- Individual
- Must be a licensed real estate broker
- The procuring cause of the sale and
- employed by the buyer or seller under a valid contract
-
Procuring Cause (responsible for the sale)
The broker must have started or caused an unbroken chain of events that ultimately resulted in the sale.
-
Ready, Willing and Able Buyer
- Buyer who is:
- prepared to buy on the seller's terms and ready to take positive steps toward consummation of the transaction
-
Reason's the Broker May Still be Compensated if the Transaction is NOT Commsumated
- If the seller:
- had a change of mind and refuses to sell
- has a spouse that refuses to sign the deed
- had a title with uncorrected defects
- committed fraud with respect to the transaction
- was unable to deliver possession within a reasonable time
- insisted on terms no in the listing, (ex. the right ti restrict the use of the property or
- had a mutual agreement with the buyer to cancel the transaction
-
Broker May Share Fees
- A broker my share fees with a salesperson licensed with the broker
- another licensed, or a consumer represented by the broker
-
Broker May Not Share Fees
A broker may not pay fees, commissions or other compensations to unlicensed persons for services for which the real estate licensure is required
-
Forms of Compensation
Personal property such as a new TV or premiums such as vacations and the like and money
-
Referral Fees
- Are legal fees paid between brokers for business
- Individuals must be licensed brokers
-
Real Estate Salesperson's Commission
- Amount of compensation a sales person receives is set by mutual agreement between the broker and the sales person
- Broker may pay a fixed salary or a share of the commissions from transactions originated by a sales person
- A salesperson may also pay all or part of the expenses of the advertising listed properties
-
Commission Types
- 100% commission in which salespersons pay a monthly service charge to their brokers to cover the costs of oiffice space. telephones and supervision in return for keeping 100% of the commissions for the sales they negotiate
- 100% commissioned sales people pay all of their related business expenses
Graduated commission splits are based on a sales person achieving specified production goals
ONLY THE EMPLOYING BROKER CAN PAY THE COMMISSION. THE COMMISSION MUST BE RECEIVED BY THE EMPLOYING BROKER AND THEN PAID TO THE SUPERVISOR
-
Fee for Services
- Buyers may use all or one of the broker's services
- Licensees my either chage an hourly rate or a flat fee for a particular service with the permission of the broker
-
-
Anti Trust Laws
Both federal and state laws
-
Sherman Antitrust Law
Prohibits contracts or conspiracies that create monopolies
-
Clayton Act
- Prohibits exclusive tie-in sales, price discriminations and mergers and acquisitions that unfairly restrain trade
- Allows parties to be awarded up to three times the amount of damages sustained, attorney fees and other litigation costs
-
Federal Trade Commission Act
- Fills in loopholes of other laws and allows monetary relief and permits investigations of such activities
- FTC can issues cease and desist orders to top violators from antitrust practices.
-
Most Common Anti Trust Violations
- Price fixing
- Group boycotting
- Allocation of customers or markets
- Tie-In agreements
-
Antitrust Division of the US Department of Justice or the Federal Trade Commission
Enforce federal laws
-
Attorney General Office
- Enforces PA Unfair Trade Practices and Consumer Protections Law
- Watch dog to maintain a free and open marketplace
-
Price-Fixing
- Setting prices for products or services rather than letting the competition in the open market establish those prices
- Occurs when competing brokers agree to set uniform sales commissions, fees or management rates
- ILLEGAL
- Brokers must independently determine commission rates for their firms only.
-
Group Boycotting
Occurs when 2 or more business conspire against other businesses or agree to withhold their patronage to reduce competition.
-
Allocation of Consumers or Markets
Allows buyers or sellers to go where they would like to go for services
-
Tie-In Agreements (Tying Agreements)
- Agreements to sell one product on the condition that the buyer also purchases product as well
- The sale of the first (desirable) product is ties to the purchase of a second (less desirable product
- Illegal to require that buyers or sells use more than one of the broker's services
-
Penalties
- Before 2004, violators of the Sherman Act may be fined up to $350,000 and/or sentenced to no more than three years of imprisonment. Corporations my be fined up to $1 million
- After 2004-Individuals may face up to $1 million and/or up to 10 years of imprisonment-corporations may be fined up to $100 million
-
Legal Consideration and Techology
- Internet Web Sites
- Social Networking Sites
- E-Mail
- Internet Advertising-common laws include the following-use include the licensee's name, office address and broker affiliation-status of sales person or broker must be disclosed on each page of a website that contains an advertisement
- AN ADVERTISEMENT MUST BE A TRUE REPRESENTATION AND NOT BE MISLEADING MUST BE HONEST AND TRUTHFUL
- National Do Not Call Registry-managed by FTC
- CAN-SPAM Act of 2003 (Controlling the Assault of Non-Solicited Pornography and Marketing Act)
- Junk Fax Prevention Act of 2005
|
|