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Real Estate License Information
The purpose of a real estate license is to protect both the consumer and the licensee. It is important for both the consumer and licensee to understand the obligations and restrictions of the different real estate licenses that may be held. The two main real estate licenses held by people who negotiate the sale or lease of real property are the real estate broker license and the salesperson's license. The terms agent, broker, sales agent, salesperson, sales associate and broker associate are all used to identify individuals holding either a broker or salesperson license. A Real Estate Agent (or Real Estate Licensee) is licensed by the Department of Real Estate, holds either a broker or salesperson license, and negotiates sales or leases for other people. A Real Estate Broker holds a real estate broker license and negotiates sales or leases for other people. In addition, a real estate broker is permitted by law to employ those holding a salesperson license. Real Estate Salespersons (or Real Estate Sales Associates) hold a salesperson license and must be employed by a real estate broker to perform any of the activities of a real estate agent. Real Estate Broker Associates hold a real estate broker license and works for another broker as a salesperson. His or her employing broker may only pay a Real Estate Broker Associate a commission. A real estate salesperson does not have to be employed by a real estate broker, but must be so employed in order to engage in activities requiring a real estate license. A salesperson must be employed by a real estate broker to get paid any commissions. The escrow company pays the broker when an escrow closes, according to instructions from the brokers involved. The broker then pays the salesperson according to their commission split agreement. A salesperson may never get paid a commission directly by a buyer, seller or through escrow. Under section 10131 of the Business and Professions Code (California Civil Code) a real estate broker is someone who, for compensation, does or negotiates to perform one or more of the following activities. A salesperson, if employed by a real estate broker, may also do any of the following activities:
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