3 Important Things That a Broker of Record Can Handle

Of all the business transactions that are most significant in the life of an individual or family, the sale and purchase of the familial residence rank among the top. Even businesses, in fact, make major decisions with regard to acquiring and disposing of property. While not every real estate deal involves an intermediary between buyer and seller, most do — for good reason. Real estate brokers possess special expertise relative to local markets, property values, taxation, conveyance law, and staging. While they collect a commission from each conveyance, they provide three essential services that make a mutually beneficial deal happen.

What Is a Broker of Record?

The broker of record is the individual that is duly licensed, appointed, and recognized to oversee real estate transactions by a given state. The agent managing the sale — if not the broker — must be appointed by the broker of record. The broker of record, then, is someone who manages the brokerage. Generally, states require additional coursework and examinations — over and above those for licensing as an agent — for one to qualify as a broker of record. The agent’s authority in any sale always flows from the broker of record.

1- Compliance with Laws and Regulations

Ultimately, the broker of record is the responsible party to the state of licensure. As such, this person must assure that all aspects of a transaction conform to the commercial code and other rules affecting the sale or leasing of property. A purchase contract, for instance, may be subject to specific form and content rules, e.g. all required disclosures are made. The broker of record is responsible for this compliance. Federal statutes, too, like the Fair Housing Act, are standards to which the broker of record is held. This is a primary task.

2- Management and Administration

Just as important, the broker of record manages the agents and staff of a real estate office. Accounting, human resources, and training all fall under this role. Licenses of realtors must be valid and up to date. In addition, the broker of record provides continuing education opportunities for the salespeople in the brokerage. The broker of record also supervises the income, expenditures, profits, and losses of the organization. Meanwhile, this party can represent out-of-state brokers who work with investors and developers to acquire and sell commercial properties.

3- Property Management Representation

There does not always have to be a particular transaction underway for a broker of record to fulfill an important role. In most states, for instance, those interested in establishing a property management service must name a broker of record in order to conduct business. In this capacity, the broker will be available to the property owners and management companies to help resolve disputes, if necessary, and consult on leasing terms.

Whether apartment buildings, commercial properties, or single-family residences, real estate transactions are highly regulated at every level of government. Having a seasoned broker of record in place assures compliance and professionalism. Using a broker of record can help avoid costly mistakes in real estate transactions so it is well worth the money to invest in using one.