Chapter 19

Licensing Laws 
and Professional Affiliation
_______________________________________
License
•	A person who, for compensation or promise of compensation, lists or offers to list, sells or offers to sell, buy or offers to buy, negotiates or offers to negotiate either directly or indirectly for the purpose of bring about a sale, purchase or option to purchase, exchange, auction, lease, or rental of real estate, or any interest in real estate 
•	is required to hold a valid real estate license.
Licensee Classes
•	Real Estate Broker
–	A person licensed to act independently in conducting real estate brokerage business.
•	Real Estate Salesperson
–	A person employed by a broker.
Qualifications
•	Pre-license education
•	Examination
•	Continuing educating
•	License renewal
Business Organization
•	Sole Proprietorship
•	Entity (Corporation or LLC)
–	Principal Broker
–	Branch offices

Broker Affiliation

•	Training – complement, enhance, and encourage your personal development.
•	Compensation – usually a percentage of earned commissions.
•	Support – what services do they offer.
•	Franchise offices
Independent Contractor
•	Paid only if a sale produces a commission and is responsible for income taxes and social security.
•	Licensed
•	Pay own expenses
•	Written agreement 

Real Estate Regulation
REALTOR®
•	Registered trade name
•	Member of NAR and not synonymous with real estate agent
•	Code of ethics first adopted in 1913
•	GRI designation by taking sponsored education courses by NAR
Employment
•	Employer considerations: (experience, financial backing & stability, training, supervision, compensation, benefits, support, facilities, size of sales force, firm marketing, “floor time”, referrals, availability of “draws”, affiliation with other offices and related business (title companies, builders, mortgage broker, insurance), franchise …)
•	Contractual considerations: (written agreement, clearly defined compensation plan, broker obligations, retaining clients …)
	
Key Terms
•	Broker
•	Independent contractor
•	License revocation
•	License suspension
•	Licensee
•	100% commission
•	Principal broker
•	Real estate commission
•	REALTOR®
•	Recovery fund
•	Sales associate
•	Salesperson