Overview

According to Wikipedia, real estate is “property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; (also) an item of real property; (more generally) buildings or housing in general. Also: the business of real estate; the profession of buying, selling, or renting land, buildings or housing.”

Land or real property began to become important to human society as soon as groups of individuals began to transition from a nomadic lifestyle to one in a fixed location. Since real property and real estate is so basic, many of the procedures and laws date back many centuries. In the United States, some aspects of real estate law can be following back to English common law.

Because real estate transactions are typically large and most people do not have extensive real estate experience, real estate agents have an important role to educate customers and assist in facilitating transactions. Real estate law, with its long history, has some very specific requirements that differ by state and, in some cases, locality. Despite its long history, real estate law and practice is constantly changing and evolving. Mistakes in real estate transactions can have major consequences, both financial and otherwise.

Florida law requires real estate agents to undergo initial and recurring training, background checks and be licensed. Florida real estate laws and regulations are designed to protect consumers and emphasize disclosure of significant facts regarding a particular piece of real estate to all parties.

Relative to residential real estate transactions, Florida real estate agents are required under state law to deal honestly and fairly with customers, disclose all known facts that affect the value of residential property and account for all funds. Unless otherwise specified, Florida agents act as “transaction brokers” which means, in addition to the above, they they must use skill, care and diligence, present all offers and counteroffers, exercise confidentiality (unless it is waived) and perform additional duties mutually agreed to.

It is important for customers to understand that, as a transaction broker, the agent is not permitted to represent one party to the detriment of another. Whenever a Florida agent is acting in a capacity other than as a transaction broker, that relationship must be disclosed to the customer in writing. In such a situation, it is important for the customer to understand what roles and responsibilities the agent will have that differ from those of the transaction broker. The agent providing a role other than that of a transaction broker should be able to explain their roles and responsibilities in detail.

The roles and responsibilities of the agent are independent of how the agent is paid. In a typical residential transaction, the agent that works with the buyer is typically compensated by a “co-op” share of the commission actually paid by the seller. But that agent cannot favor the seller against the interests of the buyer.

Real estate agents are licensed and regulated under state law. Each state is different so specific requirements in one state might not apply in another state. In addition, over the past 20 years or so, many states have made changes in the responsibilities that real estate agents have with the clients and customers, both on the selling and buying side. What this means is that agents in one state may have somewhat different relationships and responsibilities to the customers than they do in others. Even individuals with significant real estate experience in other states may be surprised by some aspects of Florida real estate operations.

Many real estate agents are also REALTORS®, member of the National Association of Realtors (NAR). The NAR is a trade association for the real estate industry in the United States. There are also state and local REALTOR® groups. State REALTOR® groups typically provide tools and support for REALTORS® while local REALTOR® organizations typically run the local Multiple Listing Service and provide other resources for members.

Florida Real Estate requirements

Any licensed Florida real estate agent is required to have a certain minimum amount of training, pass a state examination and be subject to a background check which includes submission of fingerprints. Once licensed, an agent or broker is subject to recurring education requirements.

Florida licenses both real estate sales associates and brokers. A sales associate must work under the direction of a broker. An individual who has a broker’s license may work as a sales associate under the direction of another broker and that individual is termed a broker-associate.

Laws regarding real estate sales are codified in Chapter 475, Part I of the Florida Statutes. http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0400-0499/0475/0475PARTIContentsIndex.html

Florida statutes also establish the Florida Real Estate Commission which issues regulations that affect practice of the real estate industry as well as resolves complaints regarding licensees.

Responsibilities of licensees to customers and clients are also spelled out under law. As noted above, Florida real estate agents are required to act as transaction brokers unless a different relationship is disclosed in writing. The transaction broker relationship allows the agent to employ his or her best efforts to assure a successful transaction for both parties without representing one party to the detriment of others.

Real estate agents who violate state laws and regulations can be subject to discipline ranging from warnings, to substantial fines, suspension of license or even revocation of license. In extreme cases, criminal charges can result.

REALTORS®

Real estate agents who are members of the National Association of REALTORS® are permitted to identify themselves as REALTORS®. REALTORS® are bound by a code of ethics which applies in addition to the requirements spelled out in state law and regulation. In additional to the national level, the REALTOR® organization also includes state and local associations.

In Florida, the state organization is Florida Realtors®. Florida Realtors® provides a variety of valuable services to its members including technology and legal hotlines to answer agent inquiries as well as a comprehensive repository of listing contract, sales contract and other forms to facilitate real estate transactions.

In Citrus County, the REALTORS® Association of Citrus County manages the local MLS database, provides electronic lock boxes for use on listed property, and provides a variety of educational seminars, many of which can be used to meet state recurring education requirements.

Why use a real estate agent?

Most real estate transactions represent a major financial investment and most people may have only a few such transactions during their adult lives. A good real estate agent has the training and experience to provide assistance to either buyers or sellers to facilitate completion of a successful transaction.

There are numerous pitfalls in real estate which are not always obvious to either buyers or sellers. It is the role of the agent to point out potential pitfalls and direct customers to experts if that is needed. For example, a due diligence of public records can reveal issues such as property boundaries and possible easements. If those issues are significant, a surveyor should be engaged to provide a survey of property boundaries. Home inspections are another important factor to be considered.

More information on roles and responsibilities of real estate agents are provided in the sections for buyers and sellers.