Real Estate Broker/agent

Fin 351

October 23, 2014

Ch. 12

REAL ESTATE BROKER/AGENT

        6% COMMISSION. HOWEVER, AVERAGE HAS DECREDASED TO

        5% DUE TO COMPETITION CREATED THROUGH THE SERVICES OFFERED

        VIA THE INTERNET

BUYER → BUYER AGENCY CONTRACT                        IN THESE TWO CASES [pic 1][pic 2]

SELLER→ LISITING CONTRACT                                        THE BROKER HIRED IS

                                                                        AN “AGENT” FOR A

                                                                        “PRINCIPAL” I.E BUYER

                                                                        OR SELLER

MULITPLE LISTING SERVICES: DATABASE USED BY BROKERS

        HOME OWNERS THAT DO NOT USE A BROKER ARE AT A

        DISADVANTAGE BECAUSE FSBO HOUSE ARE NOT LISTED ON MLS DATA

INCENTIVE CREATED BY 6% (5%) CONTINGETN COMMISSION

SUPPOSE SELLER X USES A BROKER AND SELLS HIS HOUSE FOR $325,000. WHAT ARE THE NET PROCEEDS OF SELLER X, IGNORIING CLOSING COSTS? THE BROKER CHARGEES A 6% COMMISSION                                                 $325,000(1-.06) =$305,500

REAL ESTATE LICENSES

LICENSE (THE REAL ESTATE SALESPERSON LICENSE REQUIRES TAKING AN EXAM) REQUIRED TO BE A REAL ESTATE “SALES PERSON” AFTER A LICENSED SALESPERSON ACQUIRES WORK EXPERIENCE HE/SHE CAN QUALIFY TOT AKE THE EXAM REQUIRED FOR A REAL ESTATE BROKER LICENSE

QUALIFYING TO TAKE EXAMS REQUIRES A SPECIFIED # OF HOURS OF COURSE WORK RULES VARY BY STATE

LISTING

A BROKER THAT SELLS PROPERTY RECIEVES COMMISON→ WHO IS A PARTY TO THE LISTING CONTRACT

OPEN LISTING:  IF PROPERTY OWNER SELLS PROPERTY BY HIMSELF, NO BORKER RECEIVES COMMISSION→ WHO IS A PARTY TO THE OPEN LISTING CONTRACT

EXCLUSIVE AGENCY LISTING:  1. ONLY ONE BROKER REPRESENTS THE SELLER

                                        2. BROKER DOES NOT RECEIVE COMMISSION IF

                                        OWNER SELLS PROPERTY HIMSELF

EXCLUSIVE RIGHT OF SALE LISTING: NO MATTER WHO SELLS THE PROPERTY SPECIFIED IN THE LISTING CONTRACT, THE BROKER NAMED IN THE LISITNG

CH. 13 CONTRACT CLOSING/CLOSING COSTS

“CLOSING COST” ARE TYPICALLY 2-5% OF THE PRICE OF A HOME.

EXAMPLE CALCULATION OF COMPUTING CLOSING COSTS

BUYER A PURCHASES HOME FROM SELLER B FOR $200,000

BUYER A DOWN PMT IS 20% OF THE SALES PRICE

                                                                BUYER _                        SELLER

REAL ESTATE BROKER’S COMMISSION                                         $12,000

ITEMS PAYABLE IN CONNECTION WITH LOAN

ORIGINATION CHARGE                                       400

APPRAISAL FEE                                                300

CREDIT REPORT CHARGE                               20

FLOOD CERTIFICATION                                       20

ITEMS THAT LENDERS REQUIRE TO BE PAID IN ADVANCE

HOMEOWNERS INSURANCE                                 $1000

PROPERTY TAXES (FOR A CERTAIN PERIOD OF TIME) 2000

TITLE CHARGES AND SERVICES                                BUYER        SELLER

LENDERS’S TITLE INSURANCE                                        $500

DEED PREPARATION                                                                $300

OWNER’S (i.e. SELLER’S) TITLE INSURANCE                                          $1100

GOVERNMENT RECORDING AND TRANSFER CHARGES

DEED                                                                        $30