Only licensed real estate brokers and salespersons can assist you with the purchase, sale, lease or exchange of real property. This assistance includes a number of services, such as examining property for basic valuations (not to be confused with the services of a licensed appraiser), negotiating purchase, sale or lease agreements, maintaining escrow accounts, and advertising.

To become licensed, an applicant must satisfactorily complete the agent curriculum in real estate approved by the Board and pass a written examination conducted by the Board’s testing service.

A real estate broker negotiates agreements to sell, exchange, purchase, rent or lease interests in real property for a fee, commission or other valuable consideration for another person. A broker is responsible for accepting and escrowing all funds, such as a deposit placed on the purchase of a home, and for finalizing transactions. A real estate broker must supervise any transactions conducted by a salesperson.

A real estate salesperson engages in the same activities as a broker, except completing the negotiation of any agreement or transaction. A salesperson also has no authority or control over escrow funds.

A salesperson must be affiliated with a broker, either as an employee or as an independent contractor, and work under the supervision of the broker. A salesperson can not operate his own real estate business.

Things Buyers Should Know

• Who does the real estate agent represent? Typically the broker represents the seller, though in today’s environment it is common for full service agencies to have seller, buyer and dual agency representation.
• Make sure the real estate agent is licensed and in good standing with the Board. (Check that both the broker’s and salesperson’s licenses have not been subject to disciplinary action, such as a suspension or revocation.) Call (617) 727-2373.
• You can negotiate the amount of any deposit.

Deposits. Both parties need to be clear about who will hold any deposit funds and what will happen in the event of a dispute between the parties. All agreements should be in writing, and no party should sign an agreement or pay any money until they are comfortable that they understand the terms.

If a broker accepts money from you for any reason, that broker must immediately deposit the payment in an escrow account, a separate bank account which is maintained specifically as a depository for funds belonging to others. The money must be kept in this separate account until the transaction is successfully completed or is terminated. It is illegal for a broker to mingle your funds with his own .

If a salesperson accepts your payment or deposit, the salesperson must turn over this money to the supervising broker.

• If you make an offer to purchase a property listed by a broker, the broker or salesperson is required to convey your offer to the owner of the property immediately.

You should be clear about your negotiating position prior to making an offer on a property. Don’t become attached to property beyond your desired price range. You could end up spending beyond your means.

• You can negotiate the terms of a purchase and sale agreement.

Purchase and Sale Agreement. A Purchase and Sale Agreement is the contract between the buyer and seller noting the terms concerning the purchase of the house (real property). Essentially, it controls the sale of the home from seller to buyer. It includes information on what is being sold, the sale price, your financing, the type of title you will get, the closing date, the amount of deposit you have paid over and how much of the house price you are financing.

Typical negotiable items include :

The amount of the deposit, the closing date, the number of loan applications you will file and the main terms of such loan (e.g. that your are trying for a fixed rate loan that does not exceed a specific percentage and number of years). You may also rid the agreement of deposit dispute clauses or include one more favorable to you as the buyer should the sale fall through.

Allow enough time in the purchase and sale agreement to obtain financing. The purchase and sale agreement should also specify how many applications for financing constitute good faith. Repeated unsuccessful applications can be costly and time consuming. Investigate pre-approval before house hunting so you are clear about financial limitations.

If the broker or the seller makes any important promises or representations about the property or what will be included in the sale, make sure those promises are contained in the purchase and sale agreement.

Allow enough time in the purchase and sale agreement to have a professional home inspection performed. Use references from friends, not the listing broker, to find your own inspector.

• On the day of the closing, before papers are passed, make one final walk through of the property to be sure it is in the agreed upon condition.
• It is often wise to seek legal advice prior to signing any documents concerning the purchase of real estate. Ask questions. Don’t sign anything until it has been explained to your full satisfaction.

Things Sellers Should Know

• Find out whether you are dealing with a salesperson or a broker. You may want to make sure that your understanding with a salesperson is confirmed by the broker, with whom the salesperson is affiliated.
• Make sure the real estate agent is licensed and in good standing with the Board. (Check that both the broker’s and salesperson’s licenses have not been subject to disciplinary action, such as a suspension or revocation.) Call (617) 727-2373.
• Sellers typically use the services of a real estate broker to sell their residential or commercial property. This is usually described as giving that broker a listing. The terms of the listing agreement are negotiable .

Listing Agreement. Often brokers present sellers with a standard listing agreement (an agreement which contains standard language). These agreements are certainly acceptable and are commonly used in the practice. (They are not, however, developed by the Real Estate Board or by state government.(Note: DREAMHOMES uses forms developed by the Greater Boston Real Estate Board) ) You may negotiate different terms that are acceptable to you and the broker.

Unless your needs demand otherwise, your listing agreement should seek to have your property advertised in as many advertising mediums as possible, thereby giving it greater exposure to more potential buyers. (For example, the Multiple Listing Service of the private realtor professional associations, local newspapers, newspapers with statewide circulation, or the internet.)

• Determine whether you want the broker to represent you exclusively. This means that the broker is the only broker representing you in the sale of your real property. This is a typical arrangement, but some sellers may wish to enter into a non-exclusive listing agreement with a broker, based on their particular needs. In such situations, the broker does not exclusively have the right to sell your real property. That broker will attempt to sell it, but you may also employ other brokers and your own efforts in selling the real property. Naturally, non-exclusive listing agreements may affect the ultimate terms of the agreement, particularly the commission. (Remember, the broker bears the cost of advertising the property, which can be substantial. With a non-exclusive listing agreement, the broker may want a larger commission for a sale made by the broker since he or she undertakes these costs without the exclusive right to sell.)
• Check if a broker has errors and omissions insurance for his or her brokering practice. (State licensing law requires real estate brokers to have a five thousand dollar surety bond, but many brokers carry additional errors and omissions insurance.) This may be helpful should there be a problem which leads to litigation against a broker.
• Check to be sure your broker will accept offers made from other brokers including brokers who represent the buyer exclusively and brokers who may not be affiliated with a professional association. Brokers are required to present all offers that are made to them to you, the seller.
• Clearly understand what your interests are so that when you enter into a listing agreement with a broker you are comfortable with the terms. You also may want to have an attorney review such an agreement before you sign it.