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Indiana Real Estate Licensee Conduct: Rules, Statutes & Issues

Instructor: Tara Schofield
Your role as a real estate agent involves various guidelines and requirements, as well as handling relationships with your managing broker. Learn what pitfalls to avoid and how to support your relationships to have success.

Real Estate Licensee Conduct

You are ready to jump into the world of real estate. This is an exciting time. Before you start working with buyers and sellers, make sure you understand some important rules and statutes that you need to follow.

Unfair Inducements

Inducements are gifts or offers that help the other party make a decision or enter into an agreement. Inducements are common and most are appropriate. However, there are some inducements that are not allowed. Unfair inducements are not appropriate, and your license could be revoked for bribing or threatening others. Let's look at an example.

You need a house to appraise for at least $300,000 in order for the buyers to get the loan they need. You are concerned the home will only appraise for $275,000. You offer the appraiser $1000 to appraise the house for $300,000. You cannot ask someone to lie or fudge the numbers. Nor can you pay off appraisers or other professionals in the industry.

Incompetent Practices

When you are a real estate agent, clients and others expect you to have competence in listing and selling properties. There are activities that are considered incompetent practices that are unprofessional and illegal, in some cases. Here are some examples:

  • Not accounting for or protecting someone else's money
  • Receiving kickbacks or other profit that is not disclosed to your client and any other party
  • Working for more than one managing broker
  • Giving a commission to someone who is not an agent

These are some examples, but there are many ways you can have an incompetent practice. The bottom line is that if you are hurting your client or are hiding things from the other party, something isn't right and you need to discuss the situation with your managing broker. You must obey the law and keep all of your activities ethical and professional.

Managing Relationships Among Broker Companies

Managing brokers must have a company with a physical location for agents to work from and may have many brokers working for the firm. However, there is only one managing broker in each office, and that person is ultimately in charge of all transactions and deals that the brokers conduct. The managing broker oversees the listings and sales in his or her office. Likewise, a managing broker of the opposite party will oversee that side of the transaction.

For instance, if you are the listing agent on a large home and property, your managing broker is responsible for the sales activities and the overall transaction. A buyer's agent from another brokerage is responsible for handling the details of the buying portion of the sale. His or her managing broker is ultimately responsible for the agent's actions and ensuring the purchase goes well and the overall transaction is complete.

Both broker companies are responsible for the overall transaction and must make sure the agents meet deadlines, complete paperwork, and complete the sale. The managing brokers must oversee the entire process. For this reason, the teams must work together and get the sale completed. This can be challenging when two competing offices must work together. In order to close the deal and earn the commission, everyone has to put differences or competition aside and get the sale done.

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