© 2013 All rights reserved. Chapter 1 The Broker's Office1 New York Real Estate for Brokers, 5 th e...

© 2013 All rights reserved.Chapter 1 The Broker's Office 1

New York Real Estate for Brokers, 5th e

By Marcia Darvin SpadaCengage Learning


Chapter 1

The Broker’s Office: Operation, Management, and Supervision


Chapter 1 Key Terms

Administrative

discipline

Apartment

information vendor

Apartment sharing

agent

Article 12-A

Article 78 proceeding

Associated real

estate broker

Blind ad

Breach of Contract

Commingling

Consent decree


Chapter 1 Key Terms (continued)

Earnest money deposit

Escrow account

Federal Trade

Commission (FTC)

Group boycott

Home inspector

Independent contractor

Kickback

Market allocation

agreement

Misdemeanor

Mortgage banker

Mortgage broker

© 2013 All rights reserved.

Chapter 1 Key Terms (continued)

Multiple listing service

Net listingPrice fixingReal estate

broker/salespersonReciprocity

Sherman and Clayton Antitrust Acts

Sponsor Tie-in arrangementTrade nameUniform irrevocable

consent and designation form

Chapter 1 The Broker's Office 5


Categories of LicensureBroker

Associate brokerSalesperson


Duties that Require LicensureReal estate transactions for others and for compensation, such as:

Listing

Selling

Purchasing

Negotiating

Leasing and renting

Auctioning

Exchanging


Licenses related to Real Estate Apartment information vendor Apartment sharing agent Real estate appraiser Home inspector Mortgage broker Mortgage loan originator Mortgage banker


NY State Real Estate Appraiser Licensure/Certification State Licensed

Appraiser Assistant

State Licensed Real

Estate Appraiser

State Certified

Residential Appraiser

State Certified

General Appraiser

The appraiser assistant

license requires no

experience.



Home InspectionLicensure Requirements

Complete 100-hours of NYS prescribed

coursework

Complete 40-hours of supervised fieldwork

Pass the NYS licensure exam

License fee $250-2 year term



What is a Mortgage Broker?

An individual or company registered by the NYS Department of Finance Services

Finds or sources loan for purchasers



NYS Requirements for a Mortgage Broker Registration

Surety bond for $10,000

$1,500 Investigative

Fee

$99 Fingerprint

Fee

Fingerprints

Credit Report

2 years of credit analysis

experience

Good standing

in community

Requirements



NYS Dept of Financial Services Licenses and Registrations

Mortgage loan originator

license for individuals

Mortgage loan servicer registration for companies

Apply online to the NYSDFS through the Nationwide Mortgage Licensing System (NMLS)

Mortgage broker registration for companies

Mortgage banker license for companies

Mortgage loan originators must work under the supervision of a mortgage banker or mortgage broker

Chapter 1 The Broker’s Office 13


Experience for the Mortgage Broker RegistrationMay use his broker license to become a

mortgage broker

Broker license must be current

Salespersons must have actively participated in the residential mortgage business for two years



Dual Agency Disclosure under the Banking and NY Real Property Laws Mortgage brokers who are also real estate brokers

representing the seller may be dual agents Legal with disclosure and informed consent

Article 12-D of NY Banking Law A mortgage brokers who is also a real estate broker

in the same transaction must disclose the dual agency

Real Property Law Section 443 also requires dual agency disclosure

The real estate agency disclosure form is used for one- to four-unit residential properties



New York Mortgage Banker Requirements

Fingerprints, $99 fee,

$3k investigativefee

BackgroundReport

Demonstrationof good

character

Filing of Surety Bond

For $50K

Existing LineOf CreditFor $1mil

Net worth ofAt least $250K

Requirements



Mortgage Brokers vs. Mortgage BankersThe requirements to

become a mortgage banker and a mortgage broker are much different

A mortgage banker may be responsible for collecting the mortgage payments and risk its own credit

The mortgage banker typically sells the loan to a larger lender

A mortgage broker does not lend his company’s money



Requirements for Broker Licensure

Pass theNYS

exam

Citizenship;legally present

English language

120 hrs ofqualifying education

Two year’s experience as a

salesperson

20 years old

Requirements



Licensure RequirementsRequirement Salesperson

Broker,Associate broker

Pocket card Must carry Must carry

License Kept by broker Kept by broker

Education(Total hours)

75 120

Experience None 2 yr salesperson,3 yrs equivalent

Fee/term of license

$50/ 2 years $150/2 years

Continuing Ed 22.5 hrs every 2 yrs

22.5 hrs every 2 yrs , unless exempt

Licensing agency

NY DOS NY DOS

License Law Article 12-A, Rules and Regs

Article 12-A Rules and Regs.


What to Bring to the State Exam

Driver’s license or other government ID-must be photo bearing

$15 exam fee Two #2 pencils Calculator (silent and non printing if

desired) You will be thumb printed


Registering for the Licensure Exam

Register online: www.dos.state.ny.us Schedule exam on the DOS Occupational Licensing

Management System, eAccessNY.

On eAccessNY, view your scheduled exam details or exam results

User-friendly access with a personal ID and password

Exam results are reported as passed or failed and available online as soon as possible after they are received by the Exam Unit and scored.



Licensure Exam You should bring the page you were requested to

print when you scheduled your exam on eAccessNY

You must have a grade of at least 70% to pass. Exam

time 2.5 hours; all questions: multiple choice

If you fail the exam, you can schedule another exam

by utilizing your account in eAccessNY



BROKER APPLICATION

Applicant must submit to the

DOS:

Hard copy broker

application mailed in

(broker applications cannot

be submitted online)

Exam passed slip

Evidence of broker

sponsorship, if

applicable

School certification

Check or credit card

to the DOS Experience points


Classes of Licensure for BrokersIndividual brokerAssociate brokerTrade-name brokerPartnership brokerCorporate brokerLimited Liability Company/PartnershipFranchises



The Broker Point System


The Broker Point System Explained

• Point system to clarify real estate experience• Required for the broker license

• A certain number of points allotted for• various types of experience

• For example, 250 points for the sale of a single• family house, a condo, co-op unit, multifamily or a

farm (with• residence under 100 acres)

• You must multiply the allotted points in each category

• by the number of transactions per category and total the points from each category



Point System Experienceo Experience for a

broker license may be obtained through:

o one type of experience such as residential sales

o a variety of experiences such as residential and commercial sales, property management, and leasing

o Three types of experience are:1. one year as a

salesperson and the accumulation of 3,500 points

2. two years’ equivalent experience in general real estate and 5,250 points

3. combined experience including work as a salesperson and general real estate and 5,250 points

1. .



Maintaining the LicenseAll broker’s licenses must

be displayed and

salesperson’s licenses

must be kept by the

broker

Branch offices must be

supervised by the broker

and managed by a broker

or associate broker

Professional liability

insurance - called

errors and omissions


Office Requirements

Branch office

requirements

Termination ofAssociation

Change of address, status,

name

Dual licensure

Licenserenewal


Licensure FeesLICENSURE FEE

Salesperson license $ 50 Associate broker/broker license $150 Each broker branch office $150 Exam fee $ 15 Change of salesperson name $ 50 Change of broker name or status $150 Change of address $ 10 Termination of association $ 10 New association $ 10 Duplicate license/pocket card $ 10


Violations of the License Law

Conduct that

demonstrates

untrustworthiness,

incompetence

Failure to provide

clients with copies

of listing

agreement or

contract of sale

Making false promises or misrepresentations

Commingling the money or property of others

Engaging in net listing agreements

Publishing blind ads


Commingling FundsCompany dollar

Portion of revenue that

ends up belonging to

the brokerage firm

Commingling

Mixing the funds of

others with the

business of personal

account

Trust or escrow

account

For all monies

received from

clients such as

deposits and down

payments


Fair Housing ComplianceAssist all people Assist all people including including minorities in minorities in living in the living in the housing of his housing of his choicechoice



Types of Discrimination

Blockbusting Redlining

SteeringDiscriminatory

advertising


Broker’s Responsibilities

Fair Housing Training

Record Keeping

Display FairHousing Poster

Equal Service


Who Can Give Legal Advice? The New York Judiciary Law prohibits the

practice of law by non-attorneys

Attorney review or approval clause

Agents can use a fill-in-the-blanks form approved by a joint committee of the Bar Association and Board of REALTORS®

Contract should clearly and prominently indicate that it is a legally binding document



What is wrong with these ads? Ad 12-Family, ½ acrelot$350,000Call (609) 777-1234

Ad 33-story Colonial$450,000Private professional community(201) 767-0234

Ad 2Brownstone$4,000,000Lydia Dupree,Liberty Park Brokerage(201) 777-4567

Ad 42 bedroom apt. for rent in upscale building$1,600/monthNo children or pets(973) 459-9999Lucy Baynes Brokerage, Inc.


Penalties for Violation of License Law

NYS DOS

Revoke license

Suspend license

Refuse license


The Brokerage Business and Antitrust Laws

Federal Antitrust Laws and Agencies

Sherman Act (1890) Clayton Act (1914)

Federal Trade Commission

U.S. Dept. of Justice


Types of Restraints of TradePrice fixing

Group boycotts

Market allocation agreements

Tie-in arrangements


Comparison of Employee and Independent Contractor

Employee Independent Contractor

Receives a salary No minimum salary

Broker withholds social security,income and unemployment tax

Salesperson pays taxes

Broker can pay for extras Sets own hours

Pays for most expenses-receives no extra compensation

Enters into contract with broker


Independent Contractor RulesIf an independent

contractor earns over $600, then the broker and contractor must file a Form 1099 misc. with the IRS

Internal Revenue Code Section 3508 (b) (c)

To comply with independent contractor status, real estate agents must have a written contract with the broker and be licensed


Broker Compliance with Independent Contractor

Maintain records at least 3 yrs

Broker supervision

Prepare and file 1099s

File yearly tax returns


Responsibilities of Sponsoring Brokers

Broker responsible

for actions oflicensee

Brokers mustsuperviselicensees

Written employment agreement

between broker and

salesperson

Brokerage firmrecords must be

maintainedfor 3 years


Multiple Listing ServicesAdvantages

Greater exposure for a listed property

Better price range due to a wider market

Property information online and updated regularly

DisadvantagesMLS charges a fee for

its service- every broker or agent who accesses the service must pay

Courts have challenged MLS for only letting real estate board members become members

Listings are sold through a broker from another firm which because of the split reduces the commission



ReciprocityNew York has reciprocity with:

Arkansas Colorado Connecticut Georgia Massachusetts Mississippi Oklahoma Pennsylvania West Virginia

© 2013 All rights reserved. Chapter 1 The Broker's Office1 New York Real Estate for Brokers, 5 th e...

Documents

Transcript of © 2013 All rights reserved. Chapter 1 The Broker's Office1 New York Real Estate for Brokers, 5 th e...