The intermediation, known as brokerage in English, it is an essential component of the real estate industry in the United States. This practice involves the representation of buyers, sellers, or other clients in transactions involving real estate. Here we will explore key aspects of real estate brokerage in detail.

Who Can Be a Broker

Eligibility to practice as a broker may vary by state and is governed by specific regulations. Here are some entities that may or may not exercise intermediation:

Yeah:

• Sole Proprietorship: A person can be an intermediary individually.
• For-Profit Corporation: For-profit corporations can operate as intermediaries.
• General or Limited Partnership: General or limited companies can carry out intermediation.
• Joint Venture: Joint ventures can participate in intermediation.

No:

• Non-Profit Corporation: Nonprofit corporations generally cannot mediate.
• Business Trust: Business trusts are not authorized for intermediation.
• Cooperative Association: Cooperative associations cannot act as intermediaries.

Relationship between Broker and Real Estate Agent

Legal Relationship

Intermediation involves a legal relationship between the broker and the agent. In the context of this relationship:

• Sales Agent (Salesperson): The agent acts as agent and fiduciary of the broker and carries out activities on behalf of the broker. May also act as subagent for the client.

  The real estate agent cannot:

  • Have 2 employers.
  • Be paid by other parties to the transaction.
  • Contractually commit clients.

Agent Employment Status

The agent's employment status, whether as an employee or independent contractor, is defined in a specific agreement between the agent and the broker.

Obligations and Responsibilities

From the Agent to the broker:

• Get and sell properties listed.
• Follow employment policies and regulations.
• Promote the ethics and reputation of the broker.

From the broker to the Agent:

• Provide data, office support, compensation and training.
• Maintain high ethical standards, policies and employment agreements.

Agent Compensation

Agent compensation is generally based on commissions according to a specific schedule after deals with collaborating brokers.

Commingling & Conversion Of funds

Commingling: Not allowed. It involves mixing the broker's personal or business funds with trust funds and may include failure to timely deposit funds.

Conversion: Not allowed. It involves using trust funds for personal or commercial purposes.

Advertising Requirements

• Advertising must not be misleading.
• Advertisements must contain the broker's identification.
• The broker is responsible for the content of the advertisements.
• Ads whose identity is hidden (blind ads) are not allowed.
• If an agent owns a property being advertised, they must make it public.

Telephone Consumer Protection Act

This law regulates unsolicited telemarketing phone calls. Applicants must identify themselves and provide contact information. Additionally, they must honor any “do not call” requests made by consumers, who may add their phone numbers to a “do not call” list.

CAN-SPAM Law

The CAN-SPAM Act prohibits the sending of unsolicited email messages (“commercial messages”) to wireless devices without the recipient's prior consent. The law requires prior authorization and the option to opt out of receiving future messages.

Antitrust Laws –Anti-Trust Laws

Antitrust laws, such as Sherman Act and Clayton Act, prohibit anti-competitive business practices. This includes the prohibition of trade restrictions, monopolies, predatory pricing, exclusive agreements and collusion between companies to disadvantage competitors. Additionally, they prohibit price fixing by two or more brokers.

Collusion

Collusion involves two or more companies conspiring to harm a competitor. This is contrary to antitrust laws and is prohibited.

Price fixing

Price fixing, in which two or more brokers agree to set prices for their services, is also prohibited by antitrust laws.

Market Allocation

Market allocation occurs when companies collaborate to restrict competition in a specific market segment in exchange for a reciprocal agreement from a competitor. This practice is illegal under antitrust laws.