Saturday, November 2, 2024

real estate legalities

    To get a real estate license in most states all you need do is attend a certain number of hours at real estate school and then pay for and take a licensing exam and, possibly, have your background checked via your fingerprints.

    Voila! You’re a real estate agent, able to counsel consumers on how to buy and sell what may be their biggest asset.

    If you think it’s fairly easy to become an agent, you’re right. Compare the process to what a taxicab driver goes through to get his or her permit:

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    • Secure a referral.
    • Take the required classes.
    • Complete the Driver’s Awareness Program.
    • Submit the referral to the State Taxicab Authority (NTA) and take their exam.
    • Submit to the NTA’s fingerprint process to check for any criminal history.
    • Submit to a physical examination, vision exam, mental health evaluation, and drug test to ensure you meet the health requirements.

    It’s true, you do have someone else’s life in your hands as a cab driver, so maybe some of these hoops are necessary. Whereas there’s rarely a life-or-death situation involved in helping real estate consumers.

    The fact is, as easy as it is to get a real estate sales license, it’s almost just as easy to lose it. And, surprisingly, you don’t have to be a hardened criminal for it to happen.

    Something as simple as unintentionally leaving out a material fact about a listing could land you in a lot of trouble with your state licensing board.

    That board, by the way, sets the rules under which they will pull an agent’s license. Although each state sets its own regulations for agents, they are all quite similar.

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    1. Always be honest

    While we all know that life is unfair at times, the fact that politicians, journalists, and others can lie with impunity and real estate agents can’t is a bit unfair.

    Not that you would lie to a client even if other agents were (and getting away with it), but if you do, and you are caught, you may lose your license.

    The state boards don’t call it lying, though. They have other words for it:

    • Omission
    • Exaggeration
    • Misrepresentation
    • Ambiguity

    They’re all types of lies and Beakley says that if you are caught doing any of them … often enough, or big enough … you will lose your license.”

    2. Stay law-abiding

    If you have an active real estate license, you likely don’t have any prior felonies because it’s not possible to get a real estate license in any of the 50 states if you do, according to Paul Beakley at RealtorMag.com.

    So, what if you are convicted of a crime after your licensed? If you live in the right state and are convicted of a crime you won’t lose your license.

    In most states, however, you will. In Texas, for instance, moral turpitude is enough to get your license pulled.

    In Minnesota, your license can be suspended or even revoked for “outstanding tax or child support obligations.”

    3. Keep your client’s money separate

    We’ve all heard the stories about the hapless agent who “borrows” a client’s funds, fully intending to pay it back.

    Then, there’s guys like this:

    [Name has been omitted}, “… a real estate agent and broker from Washington, D.C., was sentenced to prison on a theft charge stemming from the embezzlement of over $100,000 of his clients’ money …” (Justice.gov)

    This particular agent was asking buyers for huge earnest money deposits and then depositing them in his operating account instead of escrow.

    Although he assured the clients the money was safely tucked away in an escrow account, “… he spent their money on himself and his expenses within a few weeks or months of receiving the funds.”

    Yes, he lost his license, and served one year and one day in prison.

    Commingling your client’s money with your own, even temporarily, is a recipe for disaster.

    Stay out of trouble with the state board, be honest, take your time when completing contracts, and get your clients’ money out of your hands quickly. This should ensure you have a long and healthy life as a real estate agent.

    Send the Photo Introduction Series postcard to an area where you want to introduce yourself as the neighborhood expert.

    Need help targeting a specific niche of buyers or sellers? Use our Demographic Search Tool to create the ideal list (it’s easy). Or call our support team for assistance at 866.405.3638!

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