REAL ESTATE BROKERAGE

PRELIMS LONG QUIZ REVIEWER

I. OPPORTUNITIES IN REAL ESTATE

“The Real Estate Profession has expanded and offers one of the widest career selections in the
business world today. Helping people buy and sell homes, office buildings, industrial property
and corporation, farmland, property management, land development. Mortgage banking,
urban planning, real estate counselling, appraisal and research are all aspects of a career in
Real Estate” – National Association of Realtors
“Real Estate is a huge business, a spark plug of the economy. It has a multiplier effect.”

II. ADVANTAGES & REWARDS OF BEING IN THE REAL ESTATE PROFESSION

You are Flexible and Free to set your own career pace
Your efforts directly translate to the income you will get – the more hardworking you are, the
better you will earn
You become Goal-Oriented, Self-motivated, and People-Oriented
You can work independently and can choose your working environment, such as the projects
you want to sell, or the organizations you want to be affiliated with

III. OPPORTUNITIES IN REAL ESTATE (AS PRACTIONER)

As a BROKER – S.P.E.L.L.
As an APPRAISER – valuation, fair market rent, determination, HABU analysis,
Expropriation cases
As a CONSULTANT – due diligence before buying, title transfer, subdivision development and
joint-venture, feasibility study

IV. OPPORTUNITES IN REAL ESTATE (AS BUSINESS)

Real Estate Dealer – Buy & Sell/Build & Sell
Real Estate Developer
Real Estate Lessors
Real Estate Financing
Real Estate Training

V. 10 SKILLS REAL ESTATE BROKERS NEED TO DEVELOP

Verbal Communication – clarity is important
Written Communication – present proposal clearly and excellently
Presentation – be specific
Negotiation – influence and persuade clients
Salesmanship – satisfy the needs of your clients
Problem-Solving – sound judgement
Adaptability – adapt situation/environment/people
Empathy – selflessly assist clients
Time Management & Goal Setting – maximize time to gain results
Leadership – inspire and motivate people

AGENCY – By Contract of Agency, a person binds himself to render some service or to do something
in representation or in behalf of another, with the consent or authority of the latter.

VI. CHARACTERISTICS OF CONTRACT OF AGENCY

Consensual – perfected by a mere consent
Principal – can stand by itself
Nominate – it has its own name
Unilateral – it creates obligation for only one of the parties or bilateral if it is for compensation
because it gives rise to reciprocal rights and obligations
Preparatory – it is entered into as a means to an end; the creation of another contract

VII. PARTIES OF THE CONTRACT

 Principal
Agent

VIII. MODES OF CREATION OF AGENCY (A.R.E)

Appointment
Ratification – means that of a person having no authority supports to act as an Agent and the
Principal later affirms the acts of the Agent; an Agency relationship and has retroactively been
created
Estoppel – means the principal causes third parties to believe that a person is his agent and
that the third party transacts with the person (agent)

IX. MODES OF EXTINGUISHING AGENCY (E.D.W.A.R.D.)

Expiration of the Period
Death, Insolvency or Civil Interdiction of Principal or Agent
Withdrawal of the Agent
Accomplishment of the Purpose
Revocation of Agency
Dissolution of the Company which accepted or granted Agency

X. GENERAL vs SPECIAL AGENCY

General Agency – comprises all the business of the Principal
Special Agency – specific to one or more actions and transactions

XI. DUTIES OF AGENT (O.L.D.C.A.R.)

Obedience -
Loyalty
Disclosure
Confidentiality
Accountability
Reasonable Care and Due Diligence

XII. LIABILITIES OF PRINCIPAL

Liable for the actions of his Agent under the “RESPONDENT SUPERIOR” (Command
Responsibility)
The knowledge of an Agent is imputed to the Principal and the knowledge imputed to the
Principal includes relevant knowledge received prior to the commencement of the Agency
The acts committed by an Agent such as negligence and fraud are also attributed to the
Principal

XIII. LIABILITIES OF THE AGENT

An Agent is liable to his Principal for any violation of his duties imposed upon him by virtue of
the Agency and may also be liable to a third party for his acts that have been directed towards
that third party

XIV. DIFFERENCE BETWEEN REAL ESTATE DEALER & REAL ESTATE BROKER
As to LICENSE – A Real Estate Broker is required to secure license from PRC & HLURB (if
engaged in subd/condo projects selling); whilst a Dealer is not required to have one.
As to INCOME – Broker’s income is commission or fee while Dealer’s income is profit, gain or
rental
As to PERSONALITY – a Broker is an Agent while Dealer is not but is the Principal

XV. DIFFERENCE BETWEEN REAL ESTATE BROKER AND REAL ESTATE SALESPERSON
RE Brokerage practice may be engaged by natural (individual) or juridical (corporate;
provided the corporation employs a Licensed REB) person while the RE Salesperson engaged in
RE service practice are natural persons only
REBs are licensed by PRC while Salespersons are not licensed but only ACCREDITED
by PRC under the license of a REB.
 REBs are required to pass a written licensure examination while Salespersons are not.

XVI. REAL ESTATE BROKERAGE

Any act of agency, for a professional fee, commission or other valuable consideration, acts as an
Agent of a party in a Real Estate Transaction to OFFER, ADVERTISE, SOLICIT, LIST,
PROMOTE, MEDIATE, NEGOTIATE or EFFECT the meeting of the minds on SALE,
PURCHASE, EXCHANGE, MORTGAGE, LEASE or JOINT VENTURE, or other similar
transactions on Real Estate or any interest therein.
Workflow: Securing Inventory —>Selling Activities —> Perfection of Sale —> Consummation
of Sale —> Title Transfer

XVII. COMMON PROBLEMS REAL ESTATE BROKERS ENCOUNTER & HOW TO SOLVE THEM
Improper pricing of property
Few to No Inquiries
Unrealistic demands from Buyer
A Request to reduce Commission
Emotional Sellers
Co-Brokers who are hard to work with

Additional Notes:

4 Cs of Credit - Character, Capacity, Capital and Conditions

HABU – Highest and Best Use
REB definition is from RESA Law, Article I, Section 3, subsection g-4)
RE Salesperson definition from RESA Law, Article I, Section 3, subsection g-5: A duly accredited
natural person who performs service for, and in behalf of a Real Estate Broker who is registered and
licensed by the Professional Regulatory Board of Real Estate Service for or in expectation of a share
in the commission, professional fee, compensation or other valuable consideration.