Article by Ruth Lorenzen
Are you a buyer negotiating with someone about buying a property in Florida? If so, you need to read this information.
Recently, there has been an increase in investigations into unlicensed real estate practice in Florida. To state it very simply, by Florida law you can sell your own property yourself, or you can sell a property for another person if you're a licensed real estate sales associate or broker. There are precious few other options and those I leave to you to query with a real estate attorney.
You can easily check if someone is licensed to sell real estate in Florida by checking online with the FL Department of Business and Professional Regulation (click on "Search for a License"). It's really easy.
You can find out the current owner of a property through the Pinellas County Property Appraiser's Office website online database search. You can search by the person's name or the property address. You will also see when they purchased it and for how much.
This brings you into a "buyer beware" zone. If the person is not licensed and is not the owner they can only sell the exact interests they have in the real estate and they must disclose to you what those interests are (in writing). Don't just listen to what they say -- ask for the paperwork -- because you need to know what you're buying and need to know if the person can legally sell you that what. If you come across someone who appears to be operating like a real estate professional (who is not), or an individual tries to sell you property but they're not the recorded owner, I recommend you do not deal with them further. You may wish to report them to the authorities and immediately cease dealing with them. As I mentioned earlier, investigations into the unlicensed practice of real estate is escalating in Florida. I don't recommend you getting yourself into a position of being a "witness to" or "participant in" a transaction that later becomes part of an investigation.
Real estate activities which require a license in Florida include: advertising, appraising, selling, leasing, buying, exhanging, negotiating buying or selling, or obtaining buyers, sellers or renters of real estate or businesses. Click here for the actual specifics (read definition of 'broker'). (If the link doesn't work, search for Florida Statute 475.01.)
Also, in Florida, you may not pay a commission or referral fee to someone who is not licensed IN FLORIDA to practice real estate. If someone who is not licensed suggests you pay them a referral fee or commission to do the deal, do not deal with them.
A real estate agent can help you with many aspects of the process of finding and purchasing real estate. There is of course the obvious benefits: dealing with someone who knows properties and neighborhoods and market trends, and who has access to most of the properties on the market. These are benefits to a buyer. A licensed real estate agent is also trained in the basics of real estate law and in filling out standard purchase contracts -- contracts that have been drafted in the industry to protect the interests of both the buyer and seller. When you deal directly with an owner/seller, you have no one but yourself looking out for your interests and a contract drafted by a seller is often written to be preferential and protective of the seller, not the buyer.
One of the purposes of licensing individuals as real estate professionals is to protect the public from known unethical persons. Part of the process of obtaining a real estate license involves a background check, including sending fingerprints through the FBI, and persons of poor moral or ethical character are denied the opportunity to obtain a license. I'm not saying that all licensed professionals are perfectly ethical, but I'm saying that persons who have shown unethical or criminal actions (on record) are excluded from the pool of licensed professionals. Investigations into unlicensed real estate are escalating since more people are being swindled by unethical persons acting "as if" they are real estate professionals when they are not. The State of Florida takes their duty seriously and has designated unlicensed real estate practice as a third-degree felony.
Recently, there's been a trend to invest in real estate or in flipping real estate and in many other methods of getting quick money via real estate. This has lead to the participation of many unethical characters who do not have your best interests at heart. Click here for an example of such a case of a so-called investor group taking advantage of sellers and buyers to their own benefit. All the sellers and buyers in this article would have done better to work with a licensed real estate agent. But read the article and judge for yourself. The public records are all available online to double-check the accuracy of the article. I checked most of the records myself.
In reality, it is better for the buyer to work with a "buyer's agent" -- a term used to indicate a licensed real estate professional who works to find properties for their buyer-clients. A buyer's agent most usually gets his or her commission from the seller's agent (who gets it from the seller). In rare cases, a commission is obtained directly from the buyer, but that is usually when the buyer wants help to negotiate a sale on a property which is being sold "by the owner" who has not contracted to pay a commission to any real estate professional.
Buyers mistakenly think that they will get a better deal by working directly with a seller and cutting out the real estate agents and their commissions. This is a myth.
The reality is that owners who market their own properties directly to buyers usually ask for a higher price for their property than those who sell through real estate agents. And most FSBOs (For Sale By Owner properties) eventually get listed with real estate agents to get them sold. It's the FSBO marketing companies that do such a great job at convincing sellers to use their services (for a fee, of course) instead of a realtor's services (for a commission).
The lesson is this: Only deal with a real estate professional who is licensed to operate in Florida or directly with the bonafide owner of a property.
Call me if you would like assistance with locating a property to buy, selling your property, or negotiating a sale.
|Disclaimer: This article is intended for buyers and prospective buyers of real estate in Florida only and does not apply to real estate outside of Florida. The advice in this artice is not intended as legal advice, but general industry advice which is available to everyone. If you need legal advise, please contact an attorney.|
(c) Copyright 2006 Ruth Lorenzen. All rights reserved.
© 2006 Ruth Lorenzen. All rights reserved.