Real Estate Agency Practice & Disclosures in North Carolina

Instructor: Kyle Aken

Kyle is a journalist and marketer that has taught writing to a number of different children and adults after graduating from college with a degree in Journalism. He has a passion for not just the written word, but for finding the universal truths of the world.

The lesson provides an overview of the rules and disclosures related to real estate brokers in North Carolina. Rules about disciplinary actions, agency rules, disclosures, and client relations are included.

North Carolina Real Estate Practice

Jennifer was interested in a real estate profession in North Carolina. She found out that the North Carolina Real Estate Commission (NCREC) handled the licensure and rules for real estate brokers. All persons who want work with selling, buying, renting, or conducting other real estate transactions need a broker's license.

The primary mission of the NCREC is to protect the overall public interest related to real estate transactions in the state. One component to fulfill this purpose is setting standards for licensing and regulating the practice of real estate.

Disciplinary Actions

It is important for those working at a real estate agency to know that the NCREC has the authority to impose disciplinary actions toward licensed brokers as noted in North Carolina General Statutes §93A-6. The statute lists many actions that can lead to the suspension or revocation of a license. As Jennifer studied this she noticed that most violations were based on either misrepresenting an important fact that is part of the transaction or miss handling funds. She made note of the prohibition against any 'conduct which constitutes improper, fraudulent or dishonest dealing.' She also made sure to remember that omitting material information was as harmful as misrepresentation.

Broker Agency Rules: Agreements and Disclosures

Once licensed, Jennifer made sure to follow NCREC rule A-104 covering agency agreements and disclosures. She learned that in order to represent a client, a written agreement was required. In addition, any sale, lease, rental agreement, or other transaction involving real estate had to be reduced to a written contract signed by all parties. Listing agreements were required to have a termination date unless it was an agreement between a landlord and broker to find tenants.

In the case of a real estate sale, certain disclosures are mandated by the NCREC. Jennifer understood that when she had her first meeting, officially named a first substantial contact, she had to provide any potential buyers or sellers with a Working with Real Estate Agents brochure written by the NCREC. Not only did she need to give them a copy, she needed to review the content in detail with the prospective seller and/or buyer. A first substantial contact occurs when the agent begins to work on behalf of the client and provides detailed assistance.

Agency Relationships and Dual Agents

Another mandatory disclosure required at the first substantial contact is to let the potential client know the broker's and agency's relationship as either a seller's agent or a buyer's agent. In other words, if the broker is already in an agreement as the seller's agent for a specific property and that broker is meeting with a potential buyer, the broker must notify that possible buyer in writing at the beginning of the first meeting. A broker can work as a dual agent and represent both the seller and a buyer if all parties agree in writing to that arrangement.

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