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The term "broker of record" describes a licensed real estate broker responsible for one or more licensed real estate agents involved in representing a buyer or seller in real estate transactions, according to the California Department of Real Estate. Brokers may also supervise leases and other property transactions. Although each state determines the legal requirements for a broker of record, there are a few key duties that all states mandate.
Establish and Maintain Working Relationships
Brokers of record, also known as BOR, must work with title companies, attorneys, escrow agents, banks, appraisers, pest control companies, accountants and agents in the office where the broker is responsible for supervision. The BOR must assist office real estate agents in working through problems and suggest alternatives when difficulties threaten to dissolve a real estate transaction. BORs may also work with clients, if office agents request assistance.
All states require the broker of record to maintain official files of real estate transactions using state and federally mandated forms. While most larger offices also employ at least a minimal secretarial staff, small real estate offices may require the broker to serve in the secretarial position. The BOR must maintain an "organizational chart and plan," according to the California Department of Real Estate, that lists specific requirements and duties for the real estate agents in the office. Most offices maintain checklists of required legal documents that must be signed and retained by law.
The BOR provides training for new staff and continuing education related to the profession for seasoned agents. This training is in addition to the required continuing education requirements to meet state re-licensing laws. The broker may conduct the training or arrange for office members to attend training from other sources. Training may be done in group sessions, classes for individuals or through online education.
Brokers of record must remain current regarding real estate law, disclosures and contracts. The broker is responsible for updating staff and licensed agents about any changes in the laws and licensure requirements and providing access to the appropriate forms and disclosures.
States including California and New Hampshire require the broker of record to sign a formal declaration listing the agents in the office. The signed declaration also states the BOR will act to "direct, supervise and manage" the licensed agents and any employees in the office. Failure to meet the requirements involves fines and censure of the broker. The BOR requires agents to meet state legal requirements for errors and omission insurance and state licensure. The BOR is responsible for maintaining a strong ethical environment in the office and enforcing it when agents transgress.
The broker of record is the official recipient for real estate commissions. The broker places commissions in a special account and then makes payment to agents according to contract agreements. The terms of the agreement vary greatly, even within the same state and sometimes within the same office. Agents negotiate contract terms with the broker of record. A BOR must keep accurate financial records for all funds received and paid out.
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