Understanding Real Estate Sales Licences

Posted 11:45 a.m. Dec 18, 2012 — Updated 11:45 a.m. Dec 18, 2012

When you meet a real estate sales representative for the first time, chances are that you're going to be handed a business card, because people who work in real estate want you to remember their names and have their contact information close at hand. The card will likely be festooned with a list of qualifications and license numbers that can be confusing if you don't understand the ins and outs of real estate licensing. Untangling all of that can be important if you want to understand what all those certifications mean for you.

To work in real estate sales in the United States, people need to have licenses provided by state agencies. The standard for each state varies, but the process involves education, an examination, and continuing education to remain in good standing. The goal of the licensing procedures is to ensure competency in the field; a real estate salesperson should be familiar with the legal issues surrounding real estate sales, exchanges, transfers, and related activities. In addition, the licensed real estate representatives also have certain legal obligations to their clients: you, in other words.

Unlicensed assistants can perform some tasks in an office, but for real estate transactions, you're going to need to work, at a minimum, with a real estate salesperson. This person works under the supervision of a real estate broker, who must also be licensed. Brokers have more training and experience, and complete a slightly different examination. Many states require them to display their license numbers on promotional materials and also make them available upon request, and you can look them up with state agencies to confirm the validity of the license.

You may also encounter a real estate appraiser, someone who holds a different kind of real estate license. Instead of being allowed to buy and sell property, this type of real estate specialist focuses on assessing property to determine its value. Appraisers work with real estate salespeople, banks, mortgage brokers, and other professionals to find out what properties are worth for the purpose of determining listing prices, developing insurance policies, and deciding how much to extend on a mortgage loan.

In addition to licenses required by the state, many real estate salespeople also have certifications from professional organizations, such as the National Association of Realtors—members of this professional group take an examination and commit to specific professional development goals. In exchange, they are permitted to use the term Realtor on their marketing materials. Other professional groups exist for brokers as well as specialists in commercial, luxury, and other types of real estate.

Membership in a professional organization can indicate a commitment to higher standards as well as some additional protection for you, but not always. It's a good idea to check on the requirements for membership to determine what a certification really means, and to find out whether a real estate professional is an active member in good standing. Some organizations require members to take tests, attend classes, provide references, and meet sales goals to remain in good standing, making for more rigorous requirements. Others have more lax standards.

If you want to know more about a real estate professional, you can check with the Better Business Bureau or a similar consumer ratings organization to determine if there are any outstanding complaints against the person you're interested in working with. Your local courthouse can also provide information on any lawsuits or other legal issues your real estate professional may be involved in, although you should be aware that you may be charged a research fee for these records.

s.e. smith writes about San Francisco carpentry and remodeling for Networx.com.

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