Real Estate 100 - Chapter 1 - Real Estate License Requirements
What is a business opportunity?
A business opportunity is defined as a sale or lease of a business, including stock, trade fixtures, trade name, and goodwill and involves the sale of stock, trade fixtures, trade name and goodwill. A licensee salesperson's license allows an agent to sell business opportunities.
What does a corporate real estate license requires of an officer?
A corporate real estate license requires an officer to be licensed as a broker.
What is a licensee not able to do with a prepaid rental-listing license?
A licensee with a prepaid rental-listing license is not allowed to negotiate rental contracts or perform any other real estate activity.
What is a revoked license?
A revoked license is a loss of a license
What are assets?
Assets are things of value owned by the business.
What are Bulk Sale Rules?
Bulk Sale rules apply when a business is sold and involves inventory.
What is goodwill?
Goodwill is the expectation of continued public patronage.
What could violations on codes of ethics set by the NAR, CAR or NAREB call for?
If a member of any of the real estate boards violate the codes of ethics set up by each could lead to grounds for dismissal from the group and loss of membership benefits.
What is the public's expectation of a real estate salesperson?
The public's expectation of a real estate salesperson is that he is an expert in the eyes of the public and the law but most new agents soon realize that additional training and education are necessary in order to satisfy the public's expectations.
What is the State Association of the NAR called?
The state association of the NAR is called the California Association of Realtors or CAR.
What is turnover?
Turnover is the number of times the inventory is sold per year.
Are commissions negotiable?
Yes, commissions are negotiable.
What is a Profit and Loss Statement?
A Profit and Loss Statement shows the profits and loss of the business during a specific time period..
What is a balance sheet?
A balance sheet shows the financial position of a business as of a given date.
What is a bill of sale?
A bill of sale is a written instrument that passes title to personal property.
Can a broker, corporation or partnership operate under a fictitious name?
A broker, corporation or partnership can operate under a fictitious name if the name is approved by the commissioner.
What is a "bulk transfer"?
A bulk transfer is defined as the transfer of a major portion of inventory other than a sale to customers.
What does a partnership real estate license require?
A partnership real estate license requires that one partner is licensed as a broker.
If one is interested in real estate, what should the prospective licensee do?
A potential licensee should put together a personal checklist of a plan of action. This checklist should include: A. Take an interest inventory test such as the Strong Inventory Test to indicate what is your interest. B. Check with the local career center counselor to see what courses are required. C. Check the local real estate employment market for indications of sales activities. D. Select an area where you might like to work, survey the real estate offices within this territory. E. Check local newspaper real estate advertisements to determine which real estate offices are working in which neighborhoods. F. Narrow down the real estate office choices to give officers. Make an appointment to talke with an employed salesperson. G. Once decided, make an appointment with the owner/broker or the personnel manager. Write down specific questions to ask during the interview.
What is a prepaid rental-listing license?
A prepaid rental-listing license is a special two year license that allows a licensee to collect a fee for supplying a prospective tenant with a list of available rentals.
Can a real estate broker collect a prepaid fee without a special license?
A real estate broker can collect a prepaid fee without a special license if done at their regular place of business.
When is a real estate license required?
A real estate license is required when a person performs a real estate act for another for compensation. This compensation can be a commission, a fee, a salary or anything of value.
What does a real estate salesperson's license qualifies him/her to do?
A real estate salesperson's license qualifies him/her to work for a real estate broker as a real estate agent.
What is a restricted license?
A restricted license allows a licensee to continue to work but under limited conditions
During the licensee's first 4 years he or she must take how many courses?
A sales licensee must take a total of five separate three hours CalBRE approved courses for a total of 15 hours of continuing education as follows: a. Ethics b. Agency c. Fair Housing d. Trust Fund Handling e. Risk Management
What is a suspended license?
A suspended license is a temporary loss of license
How many days must the buyer given before a bulk transfer takes place?
A transferee (buyer) must give public notice 12 business days before the transfer takes place. The notice requires recording a notice of Intent to Sell Bulk and publishing it in a newspaper in a newspaper of general circulation.
After the salesperson's first renewal of the sales license, what other educational requirements are there?
After the salesperson's first renewal of the sales license, a salesperson will have to take an 8 hour combined survey course covering update issues on ethics, agency, fair housing, trust fund handling and risk management. Additional courses are based on the salesperson's interest and should not go over the required amount of 45 (includes 18 hours mandated consumer protection and 8 hour survey) courses.
What types of education is available to Realtors?
Education available to Realtors include the following: a. publications b. seminars c. state-national-international conventions d. videos e. CDs f. on-line information and other various training sessions
What happens if a real estate brokers license is suspended or revoked?
If a real estate broker's license is suspended or revoked, any salesperson working under this brokers license must cease working for that broker. Any commissions earned by the salesperson prior to the suspension or revocation are allowed to be paid to the salesperson.
What happens if the buyer and seller do not comply with the bulk sale law?
If the buyer and seller does not comply with the bulk sale law, the sale is valid between them but is void against the creditors who can attach the inventory.
If a complaint is valid, what can a licensee lose?
If the commission has violated a law or regulation, the commissioner can restrict, suspend or revoke a real estate license.
What are Liabilities?
Liabilities are unpaid debts and expenses of the business.
Wat is Net Income?
Net Income is the difference of Gross Income (Revenue from sales) less Expenses (cost of goods)
What is Net Worth?
Net Worth is the Owner's Equity, the difference between the assets and the liabilities.
Once a salesperson completes the first renewal, how many hours of required education must he/she take?
Once the salesperson completes his/her first renewal, any subsequent renewal will require 45 hours of CalBRE approved continuing education including 18 hours mandated to be Consumer Protection.
Who can own and operate a real estate business?
Only a broker can own and operate a real estate business. A real estate salesperson must be affiliated with a broker and a salesperson only receives payment from a broker for services.
What other membership perks are there in the realtor associations?
Other membership perks in realtor associations include substantial savings on insurance and other health benefits through group rates.
What kinds of other employment opportunities exist for someone with a real estate license?
Other opportunities that could exists for someone with a real estate license are: a. loan officer b. appraiser c. escrow officer d. title officer e. right of way agents f. leasing negotiators g. planners h. HUD program staff.
What areas of Real Estate are real estate oriented people needed in?
Real Estate oriented people are needed in the following areas: a. construction b. financing c. escrow d. appraising e. property management f. land development
What are some questions to ask yourself before you enter the real estate business?
Some questions to ask yourself before entering the real estate business are: 1. Why am i leaving my current employment? 2. How many sales per month will I need to generate a specific $ of income? 3. What arrangements will be made for vacations/holidays? 4. What about fringe benefits and how will they be covered? 5. Will I need to work weekends/evenings? 6. Do I have the stamina and energy it takes to be in sales? 7. Based on my personality traits, will I be continually charged and challenged? 8. Am I financially prepared to begin a career in real estate sales? Can I cover the out of pocket expenses such as local board, state and national professional fees. Can I maintain a suitable auto for transporting clients. Can I cover the incidental daily costs connected with the industry? 9. What would be the monthly office costs when working for a broker? 10. What would be the costs in maintaining my personal appearance.
What is the NAR?
The NAR is the National Association of Realtors and is a national organization and in order to be called a Realtor you must be a member.
Who are the Realtists?
The Realtists are part of another real estate organization called the National Association of Real Estate Brokers which was formed in 1947 and consists of predominantly African American real estate brokers.
What is the Sales and Use Tax?
The Sales and Use Tax is a tax on the sale of personal property.
What three classes must be taken that are acceptable to the CalBRE?
The classes acceptable to the CalBRE are: 1. Real Estate Principles 2. Real Estate Practices 3. A third class approved by the CalBRE such as Real Estate Finance, Real Estate Appraisal, Legal Aspects of Real Estate, Real Estate Economics, Business Law, Accounting or other approved classes.
Who screens applicants for licenses and investigates complaints against licensees?
The commissioner and members of the bureau screen applicants for licenses and investigates complaints against licensees.
What continuing education classes must a broker take during his/her first 4 years?
The continuing education classes a broker must take within his/her first 4 years include 18(out of 45) hours of six separate three hour CalBRE courses which include the following: a. Ethics b. Agency c. Fair Housing d. Trust Fund Handling e. Risk Mangement f. Management and supervison. g. Another 27 hours of other courses based on current CalBRE allowable courses.
What is the fine for paying a commission to an unlicensed person?
The fine for paying a commission to an unlicensed person is $100
What is the fine for persons not licensed who receives commissions?
The fine for persons who are unlicensed who receive illegal commissions is up to $20,000 and a maximum of 6 months in jail and up to $60,000 for a corporation.
Who appoints the real estate commissioner?
The governor appoints the real estate commissioner and he serves as the chief executive of the CalBRE
What is the main thrust of REALTOR trade groups?
The main thrust of Realtor trade groups is to provide information and education for their members and to pursue political agendas that are favorable to real estate ownership.
What is the major objectives of CAR?
The major objectives of CAR are: a. to unite its members b. to promote high standards c. to safeguard the land buying public d. To foster legislation for the benefit and protection of real estate e. to cooperate in the economic growth and development of the state.
What is the mission of the CalBRE?
The mission of the CalBRE is to safeguard and promote the public interests in real estate matters through licensure, regulation, education and enforcement.
How do the price of a new license differ from a license that is taken over?
The price if a new liquor license is relatively modest.. Once a license is issued, a free market develops and the price for a liquor license can skyrocket.
What is the primary focus of Realtists?
The primary focus of Reatists is to work for better housing for the communities they serve on national and international bases.
What is the purpose of the recording of the bulk sale notice?
The purpose of the recording of the bulk sale notice is to notify creditors of the seller to file a claim if trade credit is stilled owed on the inventory.
What authority does the real estate commissioner have?
The real estate commissioner administers the Real Estate Law and issues regulations that have the force of law and become part of the California Administrative Procedures Code.
What are the requirements for someone to get their Real Estate Broker License?
The requirements for someone hoping to get their Real Estate Brokers License include the following: a. Must be 18 years of age and provide proof of legal presence. b. Must not have been convicted of a crime that is a felony or that involves moral turpitude c. Must complete 8 approved courses of which five of the following must be taken: 1. Real Estate Practice 2. Legal Aspects of Real Estate 3. Real Estate Finance 4. Real Estate Appraisal 5. Real Estate Economics or Accounting d. Must complete three of the following: 1. Real Estate Office Administration 2. Escrow 3. Mortgage Loan Brokering 4. Real Estate Computer Applications 5. Common Interest Developments 6. Real Estate Principles 7. Property Management 8. Business Law e. Must have two years full time experience (within the last five years) as a real estate salesperson or it's equivalent in an allied field such as title, escrow or finance, accredited college degree or a real estate major or minor. F. Must pass the state exam of 200 questions within 5 hours with a score of 150 or more or 75% or better. g. Must pay the required application fee
What are the current requirements to become a real estate salesperson?
The requirements to become a real estate salesperson are: a. Must be 18 years of age and provide proof of legal presence. b. Must not have a conviction of a crime that is a felony or that involves moral turpitude (which may result in the denial of a license.) c. Must complete 3 college level courses prescribed by the California Bureau of Real Estate (CalBRE) d. Must be able to pass the state examination consisting of 150 multiple choice questions within a 3 hours and 15 minute time period with a passing score of 105 or more correct answers (70%) e. Upon completion of the examination, must submit the required license fee on an approved application form along with a set of classifiable fingerprints. (applicants who fail may apply immediately to re-take the exam.
What is the website where one can get information regarding the continuing education courses?
The website for CalBRE continuing education courses is: www.bre.ca.gov
What is the ABC?
This is the Alcoholic Beverage Control act and the rules involving the sale of a liquor license.
Under what exceptions do you NOT need a real estate license?
Those conditions where you don't need a real estate license are: A. Principal handling his or her own affairs B. Attorney in fact acting under a power of attorney C. Appraiser (except needs an appraiser license issued by the Office of Real Estate Appraisers. D. Attorney at law while performing duties as an attorney. (If an attorney is action as a broker, a real estate license is required. E. Trustee selling under a deed of trust F. Residential on-site property manager (If the property manager is a full-service off-site property manager, then yes, must have a license
True/False? Can a real estate salesperson and a broker form a real estate brokerage partnership?
True, a real estate salesperson and a broker can form a real estate brokerage partnership.
Approximately, how long does it take for a purchase contract to close escrow?
Typically, it takes from 45-60 days for a purchase contract to close in escrow.