Chapter 15 Real Estate 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

• 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

• Licensed to preform real estate activities on behalf of the broker
• Broker is still responsible for all transactions performed by the licensee

• 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.

• 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

• 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

The broker must have started or caused an unbroken chain of events that ultimately resulted in the sale.

• Buyer who is:
• prepared to buy on the seller's terms and ready to take positive steps toward consummation of the transaction

• 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

• A broker my share fees with a salesperson licensed with the broker
• another licensed, or a consumer represented by the broker

A broker may not pay fees, commissions or other compensations to unlicensed persons for services for which the real estate licensure is required

Personal property such as a new TV or premiums such as vacations and the like and money

• Are legal fees paid between brokers for business
• Individuals must be licensed brokers

• 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

• 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

• 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

For sale by owner

Both federal and state laws

Prohibits contracts or conspiracies that create monopolies

• 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

• 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.

• Price fixing
• Group boycotting
• Allocation of customers or markets
• Tie-In agreements

Enforce federal laws

• Enforces PA Unfair Trade Practices and Consumer Protections Law
• Watch dog to maintain a free and open marketplace

• 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.

Occurs when 2 or more business conspire against other businesses or agree to withhold their patronage to reduce competition.

Allows buyers or sellers to go where they would like to go for services

• 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

• 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

• 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