San Gabriel Valley Real Estate

From East to West Reeds Are The Best!

Why You Should Have a Broker on Your Team!

Buying and selling homes is the biggest financial transaction most people make.

A National Association of Home Builders 2013 study shows average buyers are expected to stay in a home 13 years.

That’s a huge commitment! Shouldn’t you choose a team led by someone who has made a commitment to their profession, too?

If clients do not know the difference between an agent, a Realtor, a salesperson, and a broker, it is unlikely they would choose the best person to represent them.

In California there are only two types of real estate licenses: Broker and Salesperson.

It is common to refer to either one as an “agent” or if they are a member of the National Association of Realtors as a “Realtor.”

Brokers can work independently and/or hire and supervise salesperson(s). A “broker-associate” is a fully licensed broker who chooses to associate with another broker or corporation.

A salesperson cannot act as a real estate agent or perform other services requiring a real estate license unless contracted with a broker and the activities requiring a license are performed under the supervision of that broker.

Clients often don’t know the difference and choose an uncommitted and inexperienced real estate salesperson instead of a broker or broker-associate.

The California Bureau of Real Estate (CalBRE) has recently begun a crackdown on salespersons advertising themselves as “independent sales agents,” which is against CalBRE regulations. When an agent intends to act and advertise as an “independent,” they need to first obtain a broker license.

A broker license is so highly valued that I have seen many unethical salespersons advertise that they are “brokers” or “broker-associates” without being so licensed, which is against CalBRE regulations and the Realtor Code of Ethics. I have also seen some advertise that they are “qualified” to be a broker or are a “broker candidate”; there are no such things, you either have a broker license or you don’t!

But getting a California broker license is hard! It requires commitment! It requires experience! It requires knowledge! It requires education! It requires a 5 hour written test!

According to an article published in October, 2015, in “First Tuesday Journal,” “The pass rate for sales agent and broker applicants taking the state licensing exam has remained stable at 50% and 42% respectively over the past 12 months.” That’s right, according to the article, 58% FAIL THE CalBRE BROKER EXAM! And almost all of them are already licensed as salespersons!

One of the “Ten Most Common Violations Found In CalBRE Audits” is a violation of Commissioner’s Regulation 2725 – Broker Supervision, which requires that a broker shall exercise reasonable supervision over the activities of his or her salespersons.

At  my associated real estate office there are exactly 147 salespersons under 1 broker (as of 11/22/15). There are also approximately 26 broker-associates (fully licensed brokers associated with the office); the number is approximate because brokers are independently licensed and license records do not show which office they may be associated with. These numbers are probably typical of many large offices.

One hundred and forty-seven salespersons for one broker to supervise!? How much close supervision do you think they get and when do they get it? Unfortunately, most of the supervision and review happens after the client has already signed the paperwork, too late for the client’s best interest.

There are many great salespersons (remember, they likely all call themselves “agent” or “Realtor”; nobody likes the term “salesperson”). The unfortunate truth is that many of them really need the legally mandated supervision of their employing broker, but they don’t get it.

Most people only buy or sell a home every 13 years on average. They may think that every friendly “agent” with a business card, especially from a nationally known company, is competent and trustworthy. Not choosing carefully can be costly and frustrating. Choose a Realtor who has a broker license or a team led by one!


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This entry was posted on November 22, 2015 by and tagged , , , , , , .

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Contact Us!

Rich & Annie Reed
Long Dragon Realty
CA DRE # 01906230 & 01894384



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