Real Estate Practice Regulation in Illinois

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 purpose of this lesson is to serve as a review of the real estate requirements in the state of Illinois. It will address all rules and regulations and how they coincide with the National Association of Realtors (NAR).

The Purpose of License Laws

Sally Olson moved to Illinois from Maryland. She just earned her real estate real estate and decided she wanted to move to Chicago. When she moved, Sally realized that she could not start selling real estate because she was only licensed in Maryland.

Licensing laws are put in place to help mandate what an agent/broker's role is. Most states, including Illinois, collaborate with the National Association of Realtors (NAR) which oversees regulations and the professional development of brokers and agents.

Advertising (Other Than Disclosures)

Advertising is an integral part of real estate. It gives an accurate listing of homes that are on the market, and agents have the opportunity to boost business. Although advertising is a great marketing tool, it is also heavily regulated by the National Association of Realtors (NAR) and the Illinois Department of Financial and Professional Regulation.

Under these rules, deceptive or misleading information on any marketing material--including the internet is forbidden. All advertisements must clearly and accurately display the agent/broker's name. If a person is considered a sponsored licensee, both parties' names must be on the advertisement. For example, if Sally was a broker at Michael O'Leary Real Estate Firm she must indicate that in her advertising. The advertisement should read as follows:

• Michael O'Leary Real Estate Firm, LLC

Sally Olson, agent

All advertising should list a valid, direct phone number and address of business. The phone number can be an office or direct line, so long as it is a working number. Homeowners who choose to sell their own home are sometimes considered to be a 'non-broker' meaning that they are selling their own property.

In order to act as a broker on one's behalf, they must own 100 percent of their property. If they are a partner, meaning the own 50% or less of the property, all parties involved must unanimously be in agreement to sell.

Broker or Broker Relationship

The terms real estate broker and real estate agent are often intertwined. However, there is a difference. A real estate broker is a step just above the real estate agent. A broker may only deal with exclusive properties and the operations of their firm. The requirements for a broker's license are as follows:

• Must be 21 years of age and have a GED or high school diploma

• Complete 90-hours of pre-real estate education

• Complete and pass the real estate State Licensure Exam and Application

In order to pass each course, a brokerage student must pass a proctored exam before moving on to the next course.

Document Handling

Section 1450.755 of the real estate real estate License acts states 'A sponsoring broker shall keep, or cause to be kept, all escrow records, transaction records, employee agreements, and records reflecting the payment of compensation…' This rule applies to brokers who sponsor real estate agent or work independently.

A federal and state mandate requires that all documents remain confidential. These rules also invalidate any documents by either party that has been forged, signed by a party who may have been coerced, or created with the intention to commit fraud.

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