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1 Chapter 19
CHAPTER 19: Licensing Laws and Professional Affiliation
I. Rationale for Licensing (public need for
Loyalty, Honesty, and Truthfulness)
II. Persons required to be Licensed
A. Define Broker in your state
B. Define Salesperson in your state
C. Define Sales Associate in your state
III. Discuss the need for Qualifications for
A. Examination Use Internet as resource.
B. Education Requirements
C. Continuing Education
IV. Explain Licensing Procedure and Renewal in
your state
V. Explain the Examination Services in your
state, if any
VI. Explain the applicability of Nonresident
Licensing in your state
A. Discuss Notice of Consent issues
B. Discuss Moving to Another State, and
reciprocity
VII. Licensing the Business Firm !"
A. Fictitious Business Name
B. Branch Offices
VIII. Discuss the need for Real Estate Regulation
and a State Real Estate Department
IX. Discuss License Suspension and Revocation in T"
your state
X. Discuss the requirements for Bonds and
Recovery Funds in your state
XI. Discuss the need for a Securities License in
your state
XII. Explain Considerations when Affiliating with !"
a Broker
A. Training
B. Compensation
C. Broker Support
D. Finding a Broker
E. Employment Contract
XIII. Discuss Independent Contractor Status and
IRS issues.
XIV. Discuss Franchised Offices as marketing
Chapter 19 2
Page Ref.
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323 337 Opening Remarks Start this chapter with a general discussion of the need for
licensing laws, i.e., to protect the public.
323 338 Rationale for Licensing Local Distinction: Address the history of your state's license law.
Consult your real estate commission for accurate details.
324 339 Persons Required Local Distinction: Address the licensing requirements of your
to be Licensed state, especially any new or pending requirements, i.e., appraiser
regulation.
326 340 Qualifications for Local Distinction: Address the licensing qualifications for your
Licensing state.
326 341 Licensing Procedure Local Distinction: Explain the specific licensing procedures for
your state. All states listed in chapter table 19.1.
328 343 Examination Services Local Distinction: Discuss the specific testing service, if any, and
the make-up of the test used in your state.
331 346 Real Estate Regulation Local Distinction: Explain the make-up of the real estate
regulatory body of your state.
331 347 License Suspension Stress: Difference between suspension (temporary) and revoca-
and Revocation tion (permanent).
332 348 Bonds and Recovery Local Distinction: If your state's real estate regulatory body has a
Funds bond or recovery fund, describe how it functions. Consult your
real estate commission for specific details.
334 349 Securities License Stress: Some real estate transactions require that the agent
possess both a real estate and securities license.
334 349 Affiliating with a Stress: A prospective licensee should interview with several
Broker brokerage firms before making a selection. The comparative
"shopping" may later prove beneficial as it gives one greater
knowledge of the competitors.
336 352 Independent Stress: Most real estate agents are treated as independent
Contractor Status contractors for tax purposes and therefore are not paid a salary
and do not receive employee benefits.
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3 Chapter 19
Page Ref.
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back back Topic Teaching Tips
337 354 Professional Real Stress: When one receives a real estate license he/she is a
Estate Associations licensee. It is only after joining the local Association of
REALTORS® that he/she becomes a REALTOR®.
REALTOR® is not synonymous with having a real estate license.
Also, stress that REALTOR® is a two-syllable word, not three:
REAL- TOR.
338 355 Code of Ethics Stress: Concept of highest and best use is in the Code.
NAR code available at www.realtor.org .
347 364 Wrap-Up 1. Distinguish a broker from a salesperson. (Brokers can act
independently. Salespeople must always act under the supervi-
sion of a broker.)
2. Distinguish license suspension from revocation. (Suspension
is temporary and revocation is permanent.)
3. A real estate license is all one needs to market limited partner-
ships? (False, a securities license is needed, not [necessarily] a
real estate license.)
4. Most real estate sales associates are hired as employees? (False,
as independent contractors.)
5. A licensee is automatically a REALTOR®? (False, one
becomes a “REALTOR®" upon joining the local Association of
REALTORS®.)
