©2011 cengage learning. chapter 15 a career in real estate & the department of real estate...
TRANSCRIPT
©2011 Cengage Learning
Chapter 15A Career in Real Estate & The
Department of Real Estate License Requirements
California Real Estate Principles
©2011 Cengage Learning
Chapter 15Part I
1. Describe the major career choices in the real estate industry.
2. List the requirements to become a licensed real estate salesperson or broker.
3. Examine the personal questions to consider before becoming a real estate agent.
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Real Estate Licenses
Appx. 500,000 California licensees (as of 07/06)
Broker licensees = 30%
Salesperson licensees = 70%
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SALES SPECIALIZATION Residential Commercial Industrial Business opportunities Agricultural
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LAND USE SPECIALIZATION Land development consultant Land development Urban Planning Real estate securities Syndication
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PROFESSIONAL SERVICES Real estate counselor Property manager Investment analyst Appraiser Loan officers Real estate educator
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Related fields of Employment
Title company officers Escrow agents Right-of-Way agents Government employee Employees of chain operation
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REAL ESTATE TRADE ASSOCIATIONS
National Association of REALTORS® NAR (www.realtor.org) REALTORS® REALTOR-Associate® California Association of REALTOR®
CAR (www.car.org)
National Association of Real Estate Brokers® NAREB Realtists® California Association of Real Estate Brokers®
CAREB
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DESIGNATIONS ABR Accredited Buyer Representative
Real Estate Buyer’s Agent Council (www.rebac.net)
AIREA American Institute of Real Estate Appraisers
AMO Accredited Management Organization
ASREC American Society of Real Estate Counselors
CCIM Certificate in Commercial Investment Marketing
(www.ccim.com) CPM Certified Property Manager
Institute of Real Estate Management (www.irem.org) CRB Certified Residential Broker
Council of Residential Specialists (www.crs.com)©2011 Cengage Learning
Designations CRE Counselor in Real Estate (www.cre.org) CRS Certified Residential Specialist Council of Residential Specialists (www.crs.com) GRI Graduate, Real Estate Institute IREM Institute of Real Estate Management (www.irem.org) MAI Member, Appraisal Institute WCR Women’s Council of Realtors
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Real Estate License law
1st state to enact a law for licensees1917 first state license lawReal Estate Act of 1919
Written examination
IMPORTANT CALIFORNIA EVENTS
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RE Sales License1. Must be 18 or older & legal U.S. Resident2. No criminal record3. Pass RE Principles, Practice, and one
other DRE approved course4. Pass 150 question exam 70% (105
questions)5. Application, licensee fee, and fingerprints6. Issued a 4-year license
MUST WORK FOR BROKER
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Salesperson LICENSESubmit to DRE:
• license application• pay license fee • provide live-scan fingerprints
Meet renewal requirements every 4 yearsMUST WORK FOR A BROKER
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LICENSING REQUIREMENTS Broker
AGE: Minimum 18 years of age
No criminal record
Education: 8 approved real estate courses• Including: RE Practice, Legal Aspects of RE, RE
Finance, RE Appraisal, & RE Economics or Accounting
Experience: 2 years as salesperson
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1. Real Estate Appraisal 2. Real Estate Finance 3. Real Estate Practice4. Legal Aspects of Real Estate 5. Real Estate Economics or
Accounting 6. Plus 3 more elective Real Estate
courses©2011 Cengage Learning
Broker Education :8 Required Courses
Broker Education
Real Estate Principles Business Law Property Management Escrow Real Estate Office Administration Mortgage Loan Brokering Real Estate Advanced Law Mortgage Loan Brokering Real Estate Computer Applications Advanced Finance Advanced Appraisal
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Select 3 additional courses from the following:
EXPERIENCE
Two (2) years full-time experience
Or its equivalent
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Broker License Pass examination
200 Questions 75% correct (150 questions)
After you pass: Submit application, Pay required fees Provide live-scan fingerprints
Renew every 4 years
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License renewal: First renewal for salesperson license requires: 3 hours of Agency 3 hours of Ethics 3 hours each of Fair Housing 3 hours of Trust Fund Handling 3 hours of Risk Management Second and all subsequent renewals:
45 hours C/E which must include:
1.Eight (8) hour survey course covering updates in Ethics, Agency, Trust Fund Handling, Risk Management, and Fair Housingwww.dre.ca.gov
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CHAPTER 15 QUESTIONS1. To obtain a DRE salesperson license, you
may miss how many questions on the salesperson exam?
2. How many minutes and how many seconds in time is allowed for each one question on the salesperson exam?
3. How many questions are you allowed to miss on the broker’s exam?
4. To spread the required hours of C/E equally over the renewal period, about how many hours would the licensee have to complete each year on a per year basis?
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CHAPTER 15 Answers1. Pass = 70%
Miss 150 Q x 30% = 45 questions
2. Test time = 3 hours and 15 minutes
(60 min)+(60 min)+(60 min)+(15 min) =
195 minutes / 150 questions = 1.3 minutes
.3 of 60 seconds = 20 seconds
1 minute and 20 seconds
3. Pass = 75% Miss = 25% x 200 = 50 questions
4. 45 hours C/E every 4 years =
45 / 4 = 11.25 hours per year (11-12 per year)
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California DREDEPARTMENT OF REAL ESTATEFinanced by Subdivision and license fees
Created by Legislature Governor appoints R. E. Commissioner who:
• Screens applicants, administers testing, issues licenses, investigates complaints
• Disciplines licensees who violate laws• Regulates subdivisions• Issues rules and regulations• Initiates real estate education and research
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No License Required for:
Principals, acting on their own behalfAttorney, acting in the normal course of their
business of the practice of lawAttorney-in-fact, acting for anotherOn-site resident managerTrustee, acting in a foreclosure
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Fines for receipt ofIllegal CommissionIndividual = $20,000
Corporation = $60,000
Person who pays
the illegal commission = $100
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Business OpportunitiesBill of SaleFinancing Statement
Balance sheet for a given dateProfit and Loss statement for one year
Bulk Sale Law requires Notice (12 days) before close of escrow to notify creditors of the inventory
GoodwillReal Estate licensee can sell Business
Opportunities
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Balance Sheet: Assets (Accounts receivable, personal property,
goodwill/patronage, inventory)- Liabilities What the business owes others
(Accounts payable, debts, loans)(unremitted taxes)= Net Worth (owner’s equity, retained earnings)
State Board of Equalization clearance receipt or successor’s liability
Income Statement: Profit & Loss Statement (P&L): Income Profitability of the business- Expenses For a specific period of time= Profit
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Business Opportunity
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Liquor License
Alcoholic Beverage and Liquor LicensesRelated by Alcoholic Beverage Control Act (ABC)Types of licenses
On-SaleOff-SaleBeer and Wine only
All alcoholic Beverages (General license)
New general license sold by state = $6,000
1st 5 years: Resale limited = $6,000
Cannot be transferred intercounty
Bulk Sales: Involves inventory of a business.
The World of Real Estate (as of 07/06)
California population = 37 million people
California licensed real estate agents =
Approximately 500,000
1 licensed agent for every 74 persons
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Working ConditionsLong working hoursCompetitive businessLiability high for disclosure issuesFrequently work nights and weekendCommission – no salaryNo fringe benefitsPay your own taxesNOT “Get rich quick scheme”
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Benefits of real estate licenseIndependent working conditionsGood referral system and good time management
equals good moneySelect insurance & vacation with your own
earnings to fit your individual needsWith small capital, can make excellent incomeExcellent opportunity to acquire personal
investments for profit or retirement income
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Is a career in Real Estate right for YOU?1. Why are you leaving your current job?2. How many sales per month do you need to earn
your present income?3. What vacations & holidays and fringe benefits do
you need to have and how much do you need to earn to get them?
4. Are you free to work nights and weekends?5. Do you have the stamina & energy to work sales?6. Can your personality work peaks and valleys?7. Can you financially afford to begin sales?8. Can your family & relations cope with your
change?
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Personal Checklist
1. Analyze results of an interest inventory test
2. Complete DRE approved real estate courses
3. Check local real estate employment market
4. Select a geographic work area
5. Select offices for work for your selected area
6. Interview salespersons in several offices
7. Make an appointment with the office manager
8. Submit your resume, background, credentials
9. Make a specific list of interview questions
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Review You Understanding of California Real EstatePlease take the self administered 150-question
review examination for the entire course. Answers are provided to enhance your learning
experience.Best of Luck on YOUR real estate career!
©2011 Cengage Learning