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(In all cases, please refer to Buying and Selling a Home in SD - A Consumer Guide, published by the SD Real Estate Commission.) The Agency Agreement Addendum · As the consumer guide states on page eight: o …”Once you sign the buyer agency [broker] agreement, your agent will then present an agency agreement addendum to the buyer. This addendum becomes part of the buyer agency agreement. It further explains agency relationships in a real estate transaction and allows you to instruct your agent to act solely as your agent or [allows them to act as] a limited agent.” o “If your agent’s responsible broker offers appointed agency you may elect to choose that option.” § Example from page 3 of the consumer guide explains that agents appointed by their responsible broker to represent their clients can act as a single agent for their clients, not limited agents. § Duties owed to a buyer by agent in single agency are outlined in the consumer guide on pages 4-5. § Single agent is defined on page 2 as any licensee (real estate agent) who represents only one party (in this case, only the buyer) to the transaction o Even in a company with appointed agency, the buyer could decide to buy a home which would put the agent in limited agency. That would occur if the home was listed by your agent (or a team member), the responsible broker of the firm, or an agent designated by the responsible broker to be a firm’s designated agent. All of those names will be listed in paragraph II of the agency agreement addendum. § The definition from page 2 of the consumer guide states a limited agent is one who “has a written agency relationship with both the seller and the buyer in the same transaction.” When this happens the fiduciary duties of the broker change so the buyer and seller are treated equally with the broker not being partial to either party. § The buyer is still entitled to all other fiduciary duties during limited agency. § Duties owed to a buyer by a limited agent outlined in the consumer guide on page five are: · Perform the terms of any written agreement with buyer & seller · Exercise reasonable skill & care for buyer & seller · Present all written offers in a timely manner · Disclose adverse material facts known by licensee (real estate agent) · Advise buyer or seller obtain expert advice for material fact about which licensee knows but the specifics of which are beyond the expertise of the licensee · To account in a timely manner for all money and property received · Comply with applicable federal, state, and local laws, rules, regulations and ordinances, including fair housing & civil rights statutes and regulations. Agency, whether it be single agency, appointed agency, or limited agency, includes the duty to provide reasonable skill and care. This includes educating buyers about market history and current available data regarding a property they wish to purchase.
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(In all cases, please refer to Buying and Selling a Home in SD - A Consumer Guide, published by the SD Real Estate Commission.) The Buyer Broker Agreement · Until a person buying real estate hires an agent to represent them they are not entitled to the fiduciary duties an agent owes their client. These fiduciary duties include obedience, loyalty, full disclosure, confidentiality, accounting, and reasonable care. · As the consumer guide states on page seven: o A buyer agency [broker] agreement is a written contract between you and a responsible broker whereby you become a client of the broker and the real estate [agent] you selected. This agreement employs the [agent] to seek a particular type of real estate, within a certain geographic area, during a given time, for which service you agree on the amount and method of compensation to be paid. Keep in mind that the brokerage fee is negotiable when entering into a buyer agency agreement · If the property being looked at is listed in the multiple listing service (mls), the buyers’ agent’s commission may be covered, in part or in whole, by the seller.
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Buying and Selling a Home in SD - A Consumer Guide booklet published by the SD Real Estate Commission · Buying a Selling a Home in SD - A Consumer Guide is a well written explanation of SD real estate law in layman’s terms. · The guide explains the mission of the SD Real Estate Commission on the first page. · After the introduction it has a couple of pages of definitions of common terms used in real estate. It then has an entire section aimed at people buying real estate, followed by a similar section for people selling real estate. Finally, it covers what to do if a member of the public wants to make a complaint, a section detailing prohibitions against discrimination, and a reference section of other websites. · The Guide also explains the Real Estate Relationship Form, the Buyer Broker Agreement, and the Agency Agreement Addendum in the buyer section. · The forms of agency listed on the Real Estate Relationship Disclosure form are also explained in greater detail in the guide on pages two-three.
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(In all cases, please refer to Buying and Selling a Home in SD - A Consumer Guide, published by the SD Real Estate Commission.) The Real Estate Relationship Disclosure Form The purpose of this form is to review agency types allowed under SD law, and to give people a copy of Buying and Selling a Home in SD - A Consumer Guide from the SD Real Estate Commission. · Agency is defined on page two of the guide to mean “any relationship by which one person acts for or on behalf of a client subject to the client’s reasonable direction and control.” · Client is defined as any person, including a buyer or seller, who has entered into any agency relationship with a licensee (real estate agent). Clients are owed fiduciary duties of obedience, loyalty, confidentiality of personal information, accounting, and reasonable care. · Customer is any party to a real estate transaction who does not have any agency relationship with a licensee (real estate agent). · Fiduciary is defined one who acts legally on behalf and in the best interests of another. There are certain common law duties attached to fiduciary. In real estate, if you become the "agent" of your client, you are acting legally in their best interests. The Real Estate Relationship Disclosure form lists the types of agency allowed under SD law with a brief explanation of each type. A checkmark appears next to each type of agency offered by the real estate company providing the form. Some agents will circle the types of agency which could potentially apply to the buyer signing the form. · This form is an educational form which does not commit or obligate the signer to anything. However, unless the signer signs a second time at the bottom of the form verifying they are not being represented, it should be accompanied by an agency agreement (a Buyer Broker Agreement) to hire a real estate company and their agent.
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A person wishing to become licensed in SD must first pass the Pre-Licensing class, then within two years of completing the course they need to pass two state tests. Information about these tests is at www.goamp.com The first test, the Broker Multiple-Choice Exam, is similiar to the online prec-licensing tests. It has two sections - national real estate concepts & SD Law - you must pass both sections with a 75%. If you don't pass one of the sections you must take that sections over again, but you do not need to retake the section you passed. (The price for taking either section over is the same price as taking both sections over.) The second test, the Broker Simulation Exam, is an advanced story problem test where you can not change an answer nor can you go back to previous questions. Some questions have you choose only the best answer from the choices and some questions have you choose all correct choices. Each possible answer is scored from -3 to +3 points. You must scores at least 75% on both the information gathering questions and 75% on the decision making questions. If you don't pass both sections, you will take both sections of the test again, and have to pass both sections the next time.
They are not really 'first test' and 'second test' as they can be taken in any order. After passing both- of the tests, you application for a real estate license (complete with application fee, authorization for finger printing, and finger printing fee), must be received by the South Dakota Real Estate Commission within 60 days. The application can be found on their website: http://www.state.sd.us/sdrec/. If you activate your license you must also carry Errors and Ommissions Insurance Coverage. Call me (or read my other blogs) for more complete information on start-up costs. Carol Lawhun 605-390-2338.
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Corriedale Subdivision, Rapid Valley - We invite everyone to visit our open house at 2419 S Neel on May 23 from 1:00 AM to 3:00 AM. We just had a huge price reduction down to only $141,900. This is an awesome property - over half an acre with a fully fenced back yard with trees, trees, and more trees! Also has two sheds with electricity. Then there is the garage - way oversized two car (could maybe get cars in double deep if you removed the drybar. It also has gas heat & a wall a/c). A great updated home with four bedrooms and two bath. The full bath includes a whirlpool tub. All one-level living! Property information
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Well Maintained Duplex
• 2 bedrooms in upper unit; • 1 bedroom in lower unit -  MLS® $113,500 - Investment Home Northeast, Rapid City - Upstairs has nicely sealed hardwood floors. Lower unit is almost a 1 bedroom efficiency (apt does have separate bedroom). Lower unit has new carpet, vinyl, stove, and toilet.Garden level windows. Cute cabin feel downstairs. Home has maintenance free siding, garage has masonite. Upstairs bedrooms have built-ins. Downstairs apt includes garage.Nice curb appeal. Coin op washer dryer in common utility room. Has almost a 9% CAP rate giving a buyer a great return on their investment dollar. Property information
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FAQs:
Q: Where do I get the textbook which goes with the online course? A: I may have one at my office you can pick up. (Call me at 605-390-2338 to discuss this option). You can also order the text book through the REcampus link where you registered for the course – on my site there is a tab called ‘bookstore’ where everything is in alphabetical order. The book is “Modern Real Estate Practice, 18th Edition” & is priced at $52.83. The total order cost, including shipping, is then deducted from the remaining cost of the school when you show up the first day of class. It gets the book shipped directly to you.
Q: Can I come to class before I complete the online version? A: No. The online portion does need to be completed before coming to class, as well as the final test for the online portion. All of the chapter tests can be retaken as many times as needed to pass. The chapter test only gives you one chance. It can be retaken again, just let me know if you need it a second time & I will authorize it to be set up again for you.
Q: Can I take the entire pre-license school online. A: We only offer it as the first 54-hours online. The remaining 62 hours must be taken in the classroom. A list of all approved schools offering pre-license classes can be found at the SD Real Estate Commission website. http://www.state.sd.us/sdrec/education/prelicensing.htm
Q: When are your next classes? A: Class schedules are available on my website – the pre-license portal. Scroll to the bottom of the page on the right. My classes all run Monday – Friday, 8:30-4:30 pm, for nine days.
Q: Is there time off for lunch? A: Yes, we plan on an hour for lunch each day. We do have a small kitchenette with microwave & refrigerator if you want to bring a lunch or drinks with you.
Q: How much does it really cost to get started in real estate? A: There are several up-front costs, as with any time you begin a new business. The school, the state tests, the license application & fingerprinting fee, the REALTOR board fees (if applicable), equipment, software, advertising, etc. For more information, give me a call (605-390-2338) or email me at caroll@RushmoreSchoolofRealEstate.com. Q: Why does my online link lock up on me sometimes? A: You may be using a wireless connection. Sometimes the connection is not stable and it locks up. Technical questions can be addressed with the tech support for the online course provider at either (888) 213-5124 or retechsupport@dearborn.com
Q: Can I take the online tests more than once? A: Yes. The chapter tests are set up to take as many times as you need. The final exam is set up to only take it one time. However, you can contact me & I will authorize the online provider to make it available again, if needed.
Q: Is the final exam timed? A: Yes. When you start the test and click on it there should be a notice of the time allowed to finish it.
Q: What should I bring to class? A: Your yellow textbook, note taking materials (either paper & pencil or computer), and a calculator. You can also bring anything you need as far as lunch items, drinks, etc.
Q: What is the dress code for class? A: Our school is casual, so jeans, shorts, or flip-flops are fine as long as they are not offensive.
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- After completing the second test, the student has 60 days to have their application in to the South Dakota Real Estate Commission. On day 61, state law dictates they begin the process again from the beginning. The application fee is $225, plus there is a fingerprint charge of approximately $48. The application is on http://www.state.sd.us/sdrec/.
- The license can be left inactive, in which case there are no further requirements until the new licensee activates it. All inactive licenses remain with the Commission in Pierre.
- If the new agent knows which company with which they will be associated they can send the appropriate form along with their application. If they decide later they can send the broker association form later requesting their license be sent to the broker. Once the license is activated, the agent will need to carry errors and omissions insurance ($165 and up).
- If the licensee associates with a firm which belongs to the National Association of REALTORS (NAR) and has access to the multiple listing service (mls), the agent will all need to join NAR, South Dakota Association of REALTORS, and their local board of REALTORS. This is another significant start-up expense to include in planning for a new career.
- Other start up costs may include equipment (computer, cell phone, digital camera, printer), software such as word processor, spreadsheet, email program, and flyer creation software. Additionally may be expenses such as advertising costs, web page, contact manager, signage, business cards, and postage.
Carol’s rule of thumb – figure $4000 - $6000 for start up costs including school, tests, license, board fees, e&o insurance, and miscellaneous business expenses. For more details please contact me, by phone, 605-390-2338, or email caroll@RushmoreSchoolofRealEstate.com. I look forward to talking to you!
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- Licenses can be denied on the grounds of moral turpitude. If a student is concerned if the commission would deny thier license (perhaps for writing insufficient funds checks, or for a bankruptcy, for example), there is a conditional application available on the SD Real Estate Commission website. This allows a person to apply for the license on the condition they will meet the requirements before spending money on the school and tests.
- South Dakota requires 116 hours of education to start the process. The different schools (which can be found on the SD Real Estate Commission website - http://www.state.sd.us/sdrec/) will offer you different choices - some offer the first 54 hours of class taught either through a CD-ROM or online as a self-paced study course, followed by 62 hours in the classroom. Others offer the entire 116 hours in the classroom. Some schools offer all daytime/weekday classes, others may offer nights or weekends. There is not a standard rate between the schools. As with most businesses, we do our own market research and set our own rates. This will include both national materials and SD state law materials. (SD License Law can be downloaded from the SD Real Estate Commission website given earlier. The schooling is to prepare the student for step two - the state tests.
- After completion of all 116 hours, the student has two years to pass both state tests and apply for the license. At two years and one day, they need to start over from the beginning. Both tests are given on a computer and adminstered through www.goamp.com. One test is a multiple choice test, similiar to the tests given in the 54-hour portion of the class. The student needs to pass both national law and SD law portions of the test with a 75% score. The other test is a simulation test rather than a standard multiple choice test. It will combine information gathering skills and decision making skills into story problems. The student needs to pass both the information gathering section and the decision making section with a 75% score. Each time the student takes either test the charge is $95. (So the goal is to pass them both the first time for a total of $190).
For more details please contact me, by phone, 605-390-2338, or email caroll@RushmoreSchoolofRealEstate.com. I look forward to talking to you!
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Our next pre-licensing class begins November 30 and goes week days through December 10th. Before class, students need to finish their online course of 54 hours. To sign up for the online course go to www.RushmoreSchoolofRealEstate.com & click on the Pre-License link. There is a link there to the online course, and I have the corresponding book for the course. The cost is still grandfathered in at the early-2009 rate of $950 plus tax ($1007 total). It will be going up in 2010. The first $500 is payable online as part of the sign-up for the online course. The fee covers all of the materials for the entire course. The balance is due the first day of the classroom training. The 62-hours in class include nine weekdays. Monday through Friday of the first week (November 30 - December 4) run 8:30-4:30 with an hour off for lunch each day. The following week follows the same schedule for Mon December 7 - Wed December 9. On Thursday December 10 we meet 8:30 - 3:30 with an hour off for lunch. For a more complete picture of the total cost of getting licensed see my blog entries 'Thinking about a career in Real Estate?' http://www.propertybyreferral.com/blogs/carol__scott_lawhun/archive/2009/08/25/thinking-about-a-career-in-real-estate.aspx and 'Updated Costs for getting Licensed' http://www.propertybyreferral.com/blogs/carol__scott_lawhun/archive/2009/10/26/updated-costs-for-getting-licensed.aspx
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SD real estate licensees are required to carry errors and ommissions insurance. The state policy from RISC is going up in 2010 to a base price of $165.00. There are also three available endorements available for $15 each (one each for fair housing, environmental, and real estate regulatory complaints). The October/November 2009 issue of the South Dakota Real Estate View newsletter, pg 2, published by the SD Real Estate Commission has a great explanation of this increase. Here is the access link to the newsletter: http://www.state.sd.us/sdrec/newsletter/newsletters_list.htm. Renewal fees for licenses expiring this December are $125.00 and due to be received by the commission no later than November 30, 2009. If the licensee has not completed their necessary continuing education should still make sure their renewal is received by the Real Estate Commission by November 30th. Renewals received after November 30th need to have a late fee included with them or they will be returned. New agents have the initial application fee of $225 - application must be received in the commission's office within 60 days of completing the two tests. If the license is issued during the year of 2009, the first renewal will be due November 30, 2010. If an agent is part of a board of REALTORS, they will also have their initial board dues before being able to practice real estate. This will cover their orientation, pro-rated state and national Association of REALTOR dues, and the initial local board fees. There may also may a lockbox or lockbox key fee. Our local board ReaderKey lease increased by only $1 this year to $120. Our board also charges monthly for its dues instead of annually. I like having it spread out over time instead of all at once with everything else. People looking to get their license will also need to pay for the real estate school (116 hour course), and for both of the required tests ($95 each time either test is taken). A cost which varies greatly is the cost of post-licensing or continuing education required for renewing the license. If you are still looking for those classes, links are available from the SD Real Estate Commission (http://www.state.sd.us/sdrec). I am also teaching classes - the full schedule is available at www.RushmoreSchoolOfRealEstate.com. If you have any questions, please contact me at 605-484-0557 or caroll@propertybyreferral.com
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If you have any questions, please contact me - Carol Lawhun, ABR, CNE, CRS, Instructor with Rushmore School of Real Estate & REALTOR with The Real Estate Group
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