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You make a good point. This is why I am glad I am not a real estate agent. In my book you guys are totally worth it.
An annoying side effect of the law is that I can't even pay my secretary to run up people to an open house unless she's licensed; that's how restrictive it is.
I can very easily envision any scenarios where such an unregulated atmosphere would lead to corruption and kickbacks, as well as a decline in housing prices.
One thing, I think, that would actually bring about a fairness to both sides is if the bar to entry into the field were raised significantly. Right now, it's ridiculously easy to obtain your license, so this leads to many idiots and con-men entering the field, which negatively colors the perception of the rest of us; raising the standards in a significant way would go a long way to siphoning those people out of the system. The net effect would be that both buyers and sellers should end up feeling as if they received adequate representation and no one should end up feeling that a fee was unjustly earned
And, actually, the courts have already sided with your assertion that unrepresented buyers must be treated the same as licensed agents
So, if you are required to treat them the same, why would that not include the fee split you advertised on MLS? Why would your refusing the same fee split you offered another Realtor NOT be treating them differently?
So, if you are required to treat them the same, why would that not include the fee split you advertised on MLS? Why would your refusing the same fee split you offered another Realtor NOT be treating them differently?
That didn't come across clearly; the courts have already sorted that argument out, sided against your assertion and expressly forbade anyone receiving compensation for a real estate transaction if they're not properly licensed. So I can't offer you a fee split because you're not a licensed real estate agent; I'd be breaking the law and I'm certainly not about to do that because you feel entitled to money I've rightfully earned.
As a matter of fact, here is the applicable statute in my state; I'm sure every other state has something similar in their real estate laws (any emphasis is mine):
"No real estate broker shall pay any part of a fee, commission or other compensation received by the broker to any person for any service, help or aid rendered in any place in which this article is applicable, by such person to the broker in buying, selling, exchanging, leasing, renting or negotiating a loan upon any real estate including the resale of a condominium unless such a person be a duly licensed real estate salesman regularly associated with such broker or a duly licensed real estate broker or a person regularly engaged in the real estate brokerage business in a state outside of New York"
That didn't come across clearly; the courts have already sorted that argument out, sided against your assertion and expressly forbade anyone receiving compensation for a real estate transaction if they're not properly licensed. So I can't offer you a fee split because you're not a licensed real estate agent; I'd be breaking the law and I'm certainly not about to do that because you feel entitled to money I've rightfully earned.
As a matter of fact, here is the applicable statute in my state; I'm sure every other state has something similar in their real estate laws (any emphasis is mine):
"No real estate broker shall pay any part of a fee, commission or other compensation received by the broker to any person for any service, help or aid rendered in any place in which this article is applicable, by such person to the broker in buying, selling, exchanging, leasing, renting or negotiating a loan upon any real estate including the resale of a condominium unless such a person be a duly licensed real estate salesman regularly associated with such broker or a duly licensed real estate broker or a person regularly engaged in the real estate brokerage business in a state outside of New York"
"Insofar as the statutory intent of Real Property Law section 442 is to discourage unlicensed activity, offering cash or promotional gifts, such as a cash rebate, in order to attract a new customer or client does not run afoul of the statute."
"Insofar as the statutory intent of Real Property Law section 442 is to discourage unlicensed activity, offering cash or promotional gifts, such as a cash rebate, in order to attract a new customer or client does not run afoul of the statute."
Yes, but that's not what you were asking; you were wondering why I couldn't pay you the commission split as if you were a licensed agent. That letter isn't addressing that scenario; it's addressing rebates given to clients of buyer's agents. Has nothing to do with your scenario of paying you if I'm the selling agent.
I noticed you didn't quote this part, which is a bit more relevant to the debate at hand:
"The purpose of this prohibition is to prevent licensees from compensating unlicensed individuals for services rendered that would otherwise require a real estate license."
By functioning as your own agent and demanding compensation as such, I' still running afoul of the law and this letter again expressly affirms that fact.
That letter isn't addressing that scenario; it's addressing rebates given to clients of buyer's agents.
It said "customer or client" so it is not limited to clients of buyer's agents and would also apply to the unrepresented buyer as the "customer" would it not?
It said "customer or client" so it is not limited to clients of buyer's agents and would also apply to the unrepresented buyer as the "customer" would it not?
No, it doesn't. Please read it again: "Insofar as the statutory intent of Real Property Law section 442 is to discourage unlicensed activity, offering cash or promotional gifts, such as a cash rebate, in order to attract a new customer or client does not run afoul of the statute." In the scenarios you have proposed, I am doing neither of those activities. I am not trying to attract you as a client or customer, yet you're demanding I provide you with a rebate of my commission as if I were. This letter is addressing those buyer's agents who advertise providing rebates back to their clients and asserting that it's legal to do so; has nothing to do with the commission paid out to a seller's agent.
Furthermore, I reiterate how that same letter states "Real Property Law section 442 prohibits real estate brokers from sharing commissions obtained as a result of a real estate transaction with individuals or corporations who are unlicensed. The purpose of this prohibition is to prevent licensees from compensating unlicensed individuals for services rendered that would otherwise require a real estate license." Your demanding the same compensation as a licensed broker for performing the same duties for yourself, even though you're unlicensed, is expressly against the law.
IIRC here in MD, you also need to be licensed in order to collect a commission. Attorneys and judges always think they can collect the commission but the state forbids it unless they have a RE license in addition to any law licenses.
One thing, I think, that would actually bring about a fairness to both sides is if the bar to entry into the field were raised significantly. Right now, it's ridiculously easy to obtain your license, so this leads to many idiots and con-men entering the field, which negatively colors the perception of the rest of us; raising the standards in a significant way would go a long way to siphoning those people out of the system. The net effect would be that both buyers and sellers should end up feeling as if they received adequate representation and no one should end up feeling that a fee was unjustly earned
All I can say is that I must be good at picking Realtors. Almost without exception all I have met have been consummate professionals.
One exception is a Realtor who I did 4 house purchases and 2 rentals with in 5 months and everything was perfect, and the last 2 rentals said Realtor went wonky and ended up fired by broker, and a different Realtor now handles my rentals.
I have heard that any reasonably intelligent person can pass the test without much trouble. I guess once passed all that is necessary to join NAR is to pay the fee.
Only thing is, a person being intelligent does not rule out being unstable, unscrupulous or dishonest too.
Quote:
Originally Posted by Mick_Feisty
IIRC here in MD, you also need to be licensed in order to collect a commission. Attorneys and judges always think they can collect the commission but the state forbids it unless they have a RE license in addition to any law licenses.
Thus the real estate attorney: an attorney with a RE license, and hopefully a great deal of experience in real estate.
Thus the real estate attorney: an attorney with a RE license, and hopefully a great deal of experience in real estate.
Most real estate attorneys in my area do not have a real estate license. I would wager that is the norm.
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