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The _____ is required to ascertain that Brokers are aware of all of their responsibilities. Texas Real Estate Commission The _____ course is to address the regulatory aspects of the management, operation and supervision of a real estate brokerage firm in Texas. The course provides an understanding and working knowledge of a broker's responsibilities and obligations under 22 TAC §535.2. Broker Responsibility MCE Who Must Take The Broker Responsibility MCE Course? A broker who sponsors salespersons, a designated broker of a business entity, and a license holder who is a delegated supervisor of one or more license holders (for six months or more during the supervisor's current license period), to complete this six—hour broker responsibility course to renew a license. "Act of God" A natural disaster or fire Broker must, at a minimum, maintain the following records in a format that is readily available to the Commission for at least ____ years from the date of closing, termination of the contract, or end of a real estate transaction 4 Recruitment of a salesperson by a broker is not regulated with the exception that instructors or other persons associated with a ___ may NOT recruit or solicit prospective salespersons or brokers in a classroom during class time School There is no provision in the Act or the TREC Rules prohibiting a broker from _____ a salesperson or broker—associate affiliated with another broker. Recruiting ________ are exempt from any of the provisions of the Texas Real Estate License Act. They are permitted to represent clients in real estate transactions by virtue of their license to practice law. Attorneys Brokers CANNOT share their fees with attorneys who perform a brokerage service, attorneys must seek compensation for that service directly from one of the ______ in a transaction Principals Can a listing broker share a portion of the listing broker's commission with an attorney who represented the buyer in a real estate transaction? No. A broker is prohibited from sharing fees with or otherwise compensating the attorney acting as a buyer's agent unless the attorney holds an active real estate license. Is a link to the IABS form required on my website? Yes. Rule 531.20(b) states that each broker and sales agent must provide a link on its homepage to the IABS Form labeled "Texas Real Estate Commission Information About Brokerage Services". IABS link must be in at least a ______ point font and in a readily noticeable place on the homepage of the business website of the broker and sales agent. 10 Does a link to the IABS Form in my email signature satisfy the representation disclosure required by TRELA §1101.558? No. Rule 531.20(d) states that providing a link to the IABS Form in a footnote or signature block of an email is insufficient The IABS Form can be provided by: (1) personal delivery; (2) first class mail or overnight common carrier delivery service; (3) in the body of an email; or (4) as an attachment to an email or as a link in the body of an email so long as there is a specific reference to the IABS Form in the body of the email. Reasons people give for wanting to open their own Brokerage: Wanting to create something from scratch, Wanting to be their own boss, Wanting to train and motivate real estate agents to be successful, Wanting to be leader in their community or in the industry, An entrepreneurial spirit Two good resources for finding past statistic for the real estate industry are The National Association of REALTORS® and the Real Estate Center at Texas A&M University. The _______ indicates the strength of the economy. Gross domestic product or GDP Most good economies have a GDP of about _____ 3% A new broker will need a good real estate attorney and a good _____ on their team. Certified public accountant (CPA) The Rules of the Texas Real Estate Commission require that a Broker have a_______ before you start hiring agents Policy and Procedures Manual Policy and Procedures Manual must include Agent's Authorized Activity, Advertising, Compensation, Records Management, Trust Accounts The new broker will want to consider three possibilities. Purchasing an existing real estate business, purchasing a franchise office or a start up from scratch All business entities engaged in real estate brokerage activity, including ______, need to be licensed. Partnerships If the designated broker does NOT directly own at least 10% of the entity TREC requires proof that the business entity maintains _______ in the amount of $1 million per occurrence. Errors and omissions insurance Two requirements that must be met for all advertisements Must "clearly and conspicuously contain the name of the broker, either a business entity or an individual." and An advertisement must include a designation that serves to clearly identify the advertiser as a real estate agent. TREC Qualifications to obtain a Broker's license: Citizen of the United States or lawfully admitted alien, 18 years of age or older, Resident of Texas, unless you: were licensed in Texas as a sales agent or broker in the last two years; or you are licensed as a broker in another state, Meet TREC's qualifications for honesty, trustworthiness, and integrity Instructors must pass the test with a grade of ____ or higher to be able to teach the course 80% To become a Broker you need to complete your qualifying education- ______ classroom hours of qualifying real estate courses 270 Principles of Real Estate I (30 classroom hours), Principles of Real Estate II (30 classroom hours), Law of Agency (30 classroom hours), Law of Contracts (30 classroom hours), Promulgated Contracts Forms (30 classroom hours), Real Estate Finance (30 classroom hours), Real Estate Brokerage (30 classroom hours) Brokerage mandatory courses The Real Estate Brokerage course must be completed not more than ____ years before the application date. 2 The Broker will become both the Leader and the _____ Manager Broker/Owners become responsible for the______ of the entire company Management, operation and supervision A broker must maintain all records for _____ years. 4 Purchasing or starting a new brokerage business is exciting and _____ Risky Builders do NOT have to be _____, in Texas Licensed CRS— Certified Real Estate Specialist ABR— Accredited Buyer's Representation ALC— Accredited Land Consultant SRS— Seller's Representation Specialist CRB— Certified Real Estate Broker CPM— Certified Property Manager GRI— Graduate of the REALTOR® Institute CRE— Certified Real Estate Counselor SRES— Senior Real Estate Specialist REALTOR® members agree to submit commission disputes between Brokers to arbitration through their _____ Association of REALTORS®. A broker may only _____ another license holder to withdraw or transfer money from any trust account, but the broker remains responsible and accountable for all trust money received by that broker and all deposits to or disbursements from the trust account. Authorize Any money received by a real estate sales person must be immediately delivered to the salesperson's _____ Sponsoring broker The law prohibits _____ money a license holder holds for another with a license holder's own funds. Commingling When a broker holds earnest money or any money from property management activities in a trust account, how often is a broker required to account for that money? Monthly As the broker, it will be your job to gather and ___ information Disseminate (spread) It is the obligation of a real estate agent to be knowledgeable as a real estate brokerage practitioner. The agent should be informed on (1) Market conditions affecting the real estate business and pledged to continuing education in the intricacies involved in marketing real estate for others; (2) National, state, and local issues and developments in the real estate industry (3) Exercise judgment and skill in the performance of the work. NEVER delete a message from _____ without reading it carefully. It may contain information that you and your sponsored sales people need to know. TREC Two things that an individual needs before she or he can start a brokerage firm: A real estate broker's license and funding The _____ is the newsletter from TREC and often contains information regarding changes in rules, contracts, etc. Advisor Real estate _____ offer buyers a packaged business operation and built—in name recognition, as well as national advertising paid for by the franchiser. Franchises The broker has a few choices on how to obtain funding; a broker can get a business loan or use her or his own ______ Personal funds When obtaining a Real Estate Broker's License, normally a real estate licensee must have ____ or more years of experience as an active salesperson, completed a required number of classroom hours (specified by each state), and successfully mastered the Real Estate Broker's License Examination. 2 An individual with a bachelor's or master's degree from an accredited college or university, members of the state bar, and licensed attorneys are eligible to take the _______ without completion of classroom work and real estate sales experience Real Estate Broker's License Examination To become a Broker you have ______ from the date your application is filed to meet all license requirements. 1 year Once you have met all the requirements to get your license, TREC will send an active broker license to you via Email A ______ is a person who provides real estate services to another person in exchange for a commission Licensed Real Estate Broker Candidates for a broker license must also meet the following experience requirements: Have at least four years' active experience as a licensed real estate sales agent or broker during the 60—month period preceding the filing of the application, Your experience must total 3600 points and be reported on the Qualifying Experience Report for a Broker License. You must also include a transaction identification list for each transaction claimed on the experience report Business Structure: Doing business as an individual you will be able to do so under the name your Broker's license is in. You will be taxed as an individual and will need to pay income tax quarterly. Independent Brokers can operate under an assumed name as long as the assumed name is registered with _____ TREC Allows any number of "limited partners," whose liability is limited to the total amount of their investment in the company. Limited partnership (LP) ______ are sometimes referred to as "silent partners"—in other words, they can make investments in the company but have no voting power or control over its day—to—day operations. Limited partners The least complex business structure. It gives you the perk of pass—through taxes, limited liability and legal protection for your personal assets. Limited Liability Company (LLC) Both C and S Corps offer limited ______ Liability protection C Corporation and. S Corporation differ in the complex realm of ____ and corporate ownership Taxation C Corps are subject to _____ taxation Double S Corps are pass—through ____, allowing them to avoid being taxed at the corporate level and again on shareholders' personal income taxes. Tax entities C Corps have NO restriction on ____, they have unlimited growth potential Ownership S Corps are restricted to no more than ____ shareholders. 100 S Corps cannot be ____ by a C Corp, LLCs, partnerships, or many trusts. Owned Certain states allow companies to form a distinctive business structure called ____, it takes its name from the fact that it can have multiple members, managers, or business lines within it. Series Limited Liability Company (LLC) Allows a company to separate and protect multiple assets without the need to form additional entities. Series LLC A licensed business entity real estate broker is an organization that can act as a _____ and is qualified to conduct business in Texas. Real estate broker A licensed business entity real estate broker qualifications Be authorized to transact business in Texas and Designate an active Texas real estate broker to act on behalf of the organization A business entity cannot act as a broker in Texas unless the entity designates an _____ to act on its behalf. They must be a managing officer of the business entity and must be in good standing with the Commission. Active individual broker If the designated broker owns ____ or more of the entity, proof of the designated broker's ownership 10% Search Engine Optimization (SEO) A systematic process of ensuring that your firm comes up at or near the top of lists of typical search phrases related to your business FBN Fictitious Business Name "Doing business as" name DBA Before a business selects its name, it should make sure that no one else is using the DBA by performing a search through its _____ County clerk's office or online system Corporations are NOT required to file a _____ because the corporation is a legal entity and is entitled to use its own name Certificate of business name The DBA should be registered with the _____ and be approved before it can be used. County clerk's office There is NO requirement that a _____ included in an advertisement belong to the broker Phone number or email address The term REALTOR®, whether used on the Internet, as part of the domain name, or in any other advertisement, must refer to a member or member's company, may NOT be used with descriptive words or phrases, and SHOULD be _____ from the member's name or company's name. Ex: (johndoe—REALTOR®.com or abcrealty—) Separated The biggest issue about office space that most brokers do not feel comfortable about is the long— _______ Term lease commitment Real estate offices have to comply with the ___ requirements ADA In the 1970s the Texas Real Estate Commission adopted the first three Cannons of Ethics Fidelity, Integrity and Competency (codified in 1976) A rule or principle or standard of conduct adopted by a professional organization to guide the conduct of its members Cannons Licensees must be faithful and observant to the trust placed in them, as well as scrupulous and meticulous in performing task. Fidelity Licensees must use prudence and caution to avoid misrepresentation by acts of commission or omission. Integrity Licensees must use judgement and skill when exercising their duties. Competency Limitation or discrimination based on race, color, religion, sex, national origin, ancestry, familial status or handicap of an owner, previous or current occupant, potential purchaser, lessor or potential lessee of the property. Discriminatory Practices Includes anyone who has, had, or may have AIDS, an HIV-related illness or HIV infection Handicap Each active real estate broker shall provide this notice by (1) displaying it in a readily noticeable location in each place of business the broker maintains and (2) providing a link to it labeled "Texas Real Estate Commission Consumer Protection Notice", in at least a 10 point font The Consumer Protection Form (CN 1-2) A broker owes the highest ____ obligation to the principal and is obliged to convey to the principal all information known to the agent that may affect the principal's decision, unless prohibited by other law Fiduciary CONTINUED......