One universally applicable thing about the law - know that ignorance does not exempt from responsibility.
While the real estate business seems to be rather straightforward on the surface, it’s not by any means. Especially if we’re talking the legal side of this process. “Mediating between buyers and sellers, helping them find each other and negotiate, how hard can it be?”, outsiders may be thinking. There are lots of details that make it not so easy, particularly legalities that govern the process. Without even knowing it, your real estate team could potentially be violating some of those. Needless to say, if left unattended, it’s not going to end well. Here are 3 things you should focus on to avoid any misunderstanding with the law:
1. Unprofessional behavior.
Acting in an unprofessional manner is always an ill-advised business strategy, but acting in certain ways may actually be a violation of real estate laws. As a broker, exercising too much power over agents is unethical. In contrast, not leading your team and not taking responsibility for key decisions is poor management. It is important to find a medium where you serve as the source of inspiration and energy for your team and not as a tyrant. Do not abuse your power, but do not be afraid to apply pressure when need be.
2. Transactions without licensing.
Unfortunately, this is something that happens all too often within real estate teams. Brokers will typically allow agents to conduct business transactions, even if they do not have a license. It is imperative that a real estate team must always have a licensed professional among it in order to take responsibility for any business transactions that take place. Without a transaction license, a real estate team could potentially face fraud lawsuits.
3. Too much flexibility with agents.
Going along with the previous point, giving agents too much flexibility to do whatever they please is not a wise strategy. Some teams will allow agents to hire other members to add to the team, which is not how the hiring process should be done. A broker or team leader should always be the one who calls the shots in terms of adding to a real estate team. Low-ranking members must not make hire decisions, it’s a sole discretion of higher chains of management. Total freedom approach is likely to backfire, especially if the newcomers are not strong assets to the company.