1. Chapter 1

2. Georgia Real Estate An Introduction to the Profession Eighth Edition
Chapter 1
Introduction to Real Estate

3. Key Terms broker independent contractor license reciprocity
license revocation
license suspension
licensee
principal broker
real estate commission
real estate salesperson
realtist
REALTOR®
sales associate
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4. Overview Real estate is a unique subject.
No two situations are ever exactly alike.

5. Overview
Experience has a high correlation with success in this business.
This course combines explanations of the basic principles of real estate along with why things are done and how these principles apply to everyday activities.

6. How to Use The Textbook
Key terms are listed at the beginning of each chapter
Additional terms are set in italics throughout the text
Review questions at the end of each chapter test you on your comprehension
Answers are given in Appendix D in the back of the book
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7. Career Opportunities
Residential Brokerage requires a broad knowledge of the community and its neighborhoods; an understanding of real estate principles, law and practice; and an ability to work will with people
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8. Career Opportunities
Commercial Brokers specialize in income-producing properties such as apartment and office buildings, retail stores and warehouses. Industrial Brokers specialize in finding suitable land and buildings for industrial concerns.
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9. Career Opportunities
Farm Brokers handle small farms along with large tracts of land owned by agribusiness corporations. College training in agriculture is an advantage and on-the-job training is a must.
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10. Career Opportunities
Property Managers supervise every aspect of a property’s operations to produce the highest possible financial return over the longest period of time. A property manager’s tasks include renting, tenant relations, repairs and maintenance, accounting and advertising.
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11. Career Opportunities
A Real Estate Appraiser gathers and evaluates all available facts affecting a property’s value. Appraisers in Georgia must be licensed.
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12. Career Opportunities
Developers buy land, build homes and sell them to homeowners and investors. This can be done on a small scale or on a large scale. Urban Planners work with local governments and civic groups to anticipate future growth and land-use changes.
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13. Career Opportunities
Mortgage Financing specialists can work independently or as an employee:
Mortgage Brokers work independently. They receive a fee from the borrower for locating a lender.
Loan Officers work as an employee of a lending institution.
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14. Career Opportunities
Consulting involves giving others advice about real estate for a fee. A consultant must have a broad knowledge about real estate.
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15. Career Opportunities Investment Opportunities in real estate include:
Apartment buildings
Rental homes
Underpriced properties
Small-scale developer
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16. License Laws & Professional Affiliation
License Requirements Property owners who deal only with their own property are not required to hold a real estate license.
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17. License Laws & Professional Affiliation
A Real Estate License is required for any person who, for compensation or the promise of compensation, lists or offers to lists, sells or offers to sell, buys or offers to buy, negotiates or offers to negotiate, either directly or indirectly for the purpose of bringing about a sale, purchase or option to purchase, exchange, auction, lease or rental of real estate.
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18. License Laws & Professional Affiliation
Rationale for Licensing The public has a vested interest in seeing that real estate salespersons and brokers have the qualifications of honesty, truthfulness, a good reputation and real estate knowledge before they are allowed to negotiate real estate transactions on behalf of others.
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19. License Laws & Professional Affiliation
Rationale for Licensing All 50 states and the District of Columbia require that people who offer their services as real estate agents be licensed.
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20. License Laws & Professional Affiliation
Loyalty, Honesty and Truthfulness The Georgia Real Estate Commission (GREC) has the power to refuse to issue a license to someone with a past history of dishonesty and untruthfulness. GREC can also suspend or revoke a license once it has been issued.
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21. License Laws & Professional Affiliation
Loyalty, Honesty and Truthfulness As part of the application process, potential licensees must provide a criminal background check that is no more than 60 days old.
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22. License Laws & Professional Affiliation
People Required to Be Licensed:
Brokers
Salespeople
Appraisers
Property Managers
Community Association Managers
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23. License Laws & Professional Affiliation
People Exempt from Being Licensed
Property Owners
Attorneys acting for a client
Trustees, Receivers, Administrators and Executors acting under a will or trust
Government employees dealing in real estate
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24. Real Estate Broker
A real estate broker is licensed to act independently in conducting a real estate brokerage business. A broker can be an actual person or a business firm. If the broker is a firm, the person in charge must be a broker.
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25. Real Estate Broker
A broker receives a fee, usually a commission, based on the selling price or lease rent. The broker may represent the buyer or the seller, or both at the same time with full disclosure.
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26. Real Estate Broker
A broker may hire other brokers or salespersons for the purpose of bringing about real estate transactions.
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27. Salesperson
A real estate salesperson works for a real estate broker to list and negotiate the sale, lease or rental of real property for others in exchange for compensation, under the direct supervision of an employing broker. A salesperson cannot operate independently. They must be employed by a broker.
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28. Salesperson
When a salesperson takes a listing, they do so in the name of the broker. The salesperson is empowered to act on behalf of their broker through an independent agreement with the broker to sign on behalf of the firm.
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29. Sales Associate
A sales associate refers to anyone with a real estate license who is employed by a broker. Someone who holds a broker’s license can work for another broker. They are licensed as an associate broker.
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30. Qualifications for Licensing
Salesperson Examination
Minimum age is 18 years old
Must complete a 75-hour course
The Georgia Salesperson exam consists of 152 multiple-choice questions
A passing grade of 75% or higher is required
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31. Qualifications for Licensing
Broker Examination
Minimum age is 21 years old
Must be actively licensed for 3 of the last 5 years
Must complete a 60-hour course
10 graded computer simulation exercises
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32. Qualifications for Licensing
Continuing Education Beginning in July 2015, the continuing education requirement will be 36 hours to renew a license. Georgia has a four-year license period.
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33. Licensing Procedure
Applied Measurement Professionals (AMP) is the testing provider for GREC: Exam cost is $115 Exam locations: Lilburn, Marietta, Savannah and Macon
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34. Licensing Procedure To become licensed, you will need:
$170 certified check or credit card
GCIC Background Report
Notarized Lawful Presence Verification Document
Sponsoring Broker Form
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35. Licensing Procedure
Licenses must be renewed every 4 years to remain active. The license will lapse if it is not renewed before it expires. Licenses can be put on inactive status. The license must still be renewed every 4 years, but continuing education is not required until the license is reactivated.
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36. Licensing Procedure
Many states will issue a nonresident license to out-of-state brokers. This is especially helpful when a broker is located near a state border. Some states will give credit for the national portion of the license exam already taken, requiring only the state portion of the exam.
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37. Licensing Procedure
License Reciprocity is when one state honor’s another state’s license. Georgia has differing agreements of reciprocity with other states. Contact the real estate department of the state you are interested in for specific information.
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38. Licensing Procedure
When brokers operate outside of their home state, they may be required to file a notice of consent with the secretary of state. This enables the secretary of state to receive legal summonses on behalf of the nonresident broker.
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39. Licensing the Business Firm
A real estate broker can operate as a sole proprietorship under either the broker’s own name or a fictitious name. A broker can also operate in partnership with other brokers or as a corporation.
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40. Licensing the Business Firm
Because a corporation is an artificial being, there must be a qualifying broker who accepts responsibility for the management of the firm.
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41. Licensing the Business Firm
If the broker has multiple offices, it is not required that those offices have their own qualifying broker. It is required that the company provide adequate supervision. Each office will typically have a managing broker.
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42. Real Estate Regulation
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43. Real Estate Regulation
The state legislature enacts laws addressing the licensing and regulation of real estate brokers and salespersons. The legislature also establishes the real estate commission.
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44. Real Estate Regulation
The real estate commission deals primarily with adopting rules and regulations to implement the license law established by the legislature. In Georgia, the real estate commission has six members.
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45. Real Estate Regulation
Five of the commission members are licensees, the sixth member is a non-licensed member of the general public. Members are appointed by the Governor and confirmed by the Senate. The commission meets monthly.
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46. Real Estate Regulation
The commission hires a commissioner to oversee real estate regulation. The commissioner hires and supervises staff. Neither the commission nor any commission employee hold an active real estate license.
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47. Real Estate Regulation
Real estate commission staff collect fees, issue licenses, investigate alleged malpractices and audit broker trust fund accounts.
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48. License Suspension and Revocation
Without a real estate license, it is unlawful for a person to engage in real estate activities for the purpose of earning a commission or fee. Unless an agent has a valid license, a court will not uphold an agent’s claim for a commission from a client.
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49. License Suspension and Revocation
Reasons for license suspension and revocation include:
violation of the state’s real estate act
misrepresentation
undisclosed dual agency
commingling
acting as an undisclosed principal
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50. License Suspension and Revocation
Licenses can also be revoked or suspended for:
false advertising
obtaining a license by fraud
failure to account for a client’s funds
practicing law without a license
paying commission to unlicensed persons
conviction of a felony or certain misdemeanors
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51. License Suspension and Revocation
When the commission receives a complaint from someone regarding a licensee, the staff will conduct an investigation. If the commission decides to suspend or revoke the respondent’s license, the respondent has the right of appeal to the courts.
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52. Affiliating with a Broker
A salesperson must have a broker to work for before the actual license will be issued. If you are new to the industry, training and education will be at the top of your list when looking for a broker.
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53. Affiliating with a Broker
Compensation for salespeople is usually a percentage of the commission they earn for the broker. How much each receives is open to negotiation between the broker and each salesperson.
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54. Affiliating with a Broker
Hold interviews with several brokers. You are interviewing them as much as they are interviewing you.
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55. Affiliating with a Broker
An Employment Contract must be in writing and must stipulate how the agent will be compensated while they are with the broker and how they will be compensated when they leave the broker on transactions that have been started but not yet completed. A written agreement is required by Georgia law.
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56. Independent Contractor Status
Sales associates act like an independent contractor because the associate it typically paid only if the associate brings about a sale that produces a commission.
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57. Professional Real Estate Associations
REALTOR® is a registered trade name that belongs to the National Association of REALTORS® (NAR). It is reserved for the exclusive use of members of the National Association of REALTORS®
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58. Professional Real Estate Associations
One of the most important features of the National Association of REALTORS® is its Code of Ethics. To be recognized as a REALTOR®, one must observe the ethical standards by which the industry operates.
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59. Professional Real Estate Associations
The National Association of Real Estate Brokers is a national trade association representing minority real estate professionals. Members use the trade name Realtist.
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60. Review State Laws required to obtain a real estate license.
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