1. Chapter 19: Licensing Laws
and Professional Affiliation
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2. RATIONALE FOR LICENSING
 Does the public have a vested interest in seeing
that real estate agents have the qualifications
of honesty, truthfulness, good reputation, and
real estate knowledge?
 It was this concern that brought about real
estate licensing laws as we know them today.
 Until 1917, no state required real estate agents
to be licensed.
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3. LICENSEE
A person who, for compensation or
promise of compensation, lists or offers
to list, sells or offers to sell, buy or
offers to buy, negotiates or offers to
negotiate a sale, purchase or option to
purchase, exchange, auction, lease, or
rental of real estate, or any interest in
real estate
Must hold a valid real estate license.
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4. LICENSE TYPES
Real Estate Broker
A person licensed to act independently
in conducting real estate brokerage
business.
Real Estate Salesperson
A person employed by a broker.
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5. REAL ESTATE REGULATION
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6. STATE LICENSE REQUIREMENTS
http://www.arello.org
See Figure 19.1 page 347
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7. BROKER AFFILIATION
Training – complement, enhance, and
encourage your personal development.
Compensation – usually a percentage of
earned commissions.
Support – what services do they offer.
Franchise offices
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8. INDEPENDENT CONTRACTOR
Paid only if a sale produces a
commission and is responsible for
income taxes and social security.
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9. REALTOR®
Registered trade name
Member of NAR and not synonymous
with real estate agent
Code of ethics first adopted in 1913
GRI designation by taking sponsored
education courses by NAR
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10. NAR CODE OF ETHICS
http://www.realtor.org
See Figure 19.2 on page 360
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11. The National Association of Real
Estate Brokers (NAREB)
Promote high standards of service
and conduct & to protect the public
against unethical, improper, or
fraudulent real estate practices.
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REALTIST

12. Key Terms
 100% commission
 Broker
 Independent contractor
 License revocation
 License suspension
 Licensee
 Principal broker
 Real estate commission
 REALTOR®
 Recovery fund
 Sales associate
 Salesperson
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