How to Know If A Real Estate Broker Is Legit for You

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Real estate is a lucrative career choice for most people. Not only is it a stable career with good long-term prospects, but it offers personal rewards as well.  Real estate agents are able to earn a steady income, have a flexible schedule, and work with interesting clients and colleagues. However, the business world is also rife with scammers. 

There are plenty of fraudulent real estate agents who are only out to take your money.   If you’re thinking of becoming a real estate agent, read this article to learn the signs that could indicate your future broker is a scam. 

You need to take the time to learn the ins and outs of this career before signing up. If you intend to break into the industry, here are some tips that will help you on how to know if a real estate broker is legit.

Know the Different Types of Real Estate Agents

Before you apply to work with a real estate broker, it’s essential that you know the difference between an agent and a broker. Agents are the ones who actually have the license to sell real estate. Brokers are the ones who provide the space to facilitate the sale of real estate. 

There are different types of licenses for real estate agents.  – Real Estate Salesperson License – This license is required if you plan to sell real estate. – Real Estate Broker License – This license is required in order to act as a broker. There are also other types of brokerage licenses. – Real Estate Appraiser License – This license is required to conduct real estate appraisals. – Real Estate Investing License – This license is required to invest in real estate mortgages, deeds of trust and equity shares. – Real Estate Negotiation License – This license is required if you plan to negotiate real estate contracts. – Real Estate Condition Report License – This license is required to report on the condition of a property, even if the broker is not directly involved in the sale. – Real Estate Investment Management Service License – This license is required to manage real estate investment funds. – Real Estate Investment Company License – This license is required to manage real estate investment companies.

Find Out About a Brother’s Training

The first question to ask about a broker is about their training. Real estate is a very competitive industry, with many license holders eager to work as brokers. 

If a broker says they have been in business for several years, it’s a good sign that they are legit. However, if a broker says that they have been in the industry for only a short time, it’s important that you find out why they are getting licenses so soon.  

Before applying, take the time to research a broker’s experience. You can do this by asking for references, reading broker reviews online, and asking friends and family for recommendations. Make sure that a broker who has been in business for a relatively short time has at least a few years of experience under their belt.

Check Their Licensing Status

You can easily check out the licensing status of a broker online using the Department of Corporations’ database. The website is searchable by broker name and license number.  

You can also call the licensing department and ask to speak with an agent. The licensing department will be able to look up a broker’s license status for you. In some states, you can also look up a real estate broker by name.   

If the broker has a real estate license, but they are not the broker listed in the database, it’s a sign that they are not the broker they claim to be. If a broker is has no license, they are not legally allowed to work as a real estate broker. They could be up to other business without a license.

Ask for Proof of Financing

One other sign that a broker is legit if the broker does not have proof of financing. This means that the broker has not taken out a mortgage on the home they are selling. 

If a broker is not using a mortgage, it’s a sign that the broker is not legit.  Another way to confirm that a broker has a license is by asking for a copy of their license. It’s also a good idea to ask the broker for a copy of their real estate sales contract.

Don’t Make an Offer Unless You Are 100% Sure

A huge red flag when a broker is making an offer on a property that they do not have a mortgage on. It’s also a sign that a broker has no license.  

Conclusion

As you can tell, there are a few signs that indicate that a broker has no license. If you come across a broker who is not using their real name or who is not using a mortgage, it’s important to know that they have no license. This could mean that they are posing as someone else or that they do not have the financial capability to take out a mortgage.