5 Myths About Out-of-State Real Estate Transactions
Myth #1: Licensing laws only apply to residential brokers, not commercial brokers.
Wrong. Licensing laws apply to residential and commercial real estate brokers.
Myth #2: I’m licensed in one state, so I can transact in ANY state.
Wrong. In order for a person to provide brokerage services in a particular state, they need a license in that specific state.
Myth #3: I’m a licensed broker in the transaction state. My salespeople who are licensed under me in another state, but not in the transaction state, can transact in the transaction state.
Wrong. This is a common misconception and violation within the commercial real estate brokerage industry. In order for a person to transact in a particular state, they need a license in that specific state.
Myth #4: My firm is a licensed broker in the transaction state. Our salespeople who are licensed under the firm in another state, but not in the transaction state, can transact in the transaction state.
Wrong. This is another common misconception and violation within the commercial real estate brokerage industry. The regulators don't care that your firm is a "national" firm with entities in multiple states and multiple state licenses. All they care about is whether the people pursuing and/or working on a transaction in their state are licensed in their state.
Myth #5: I've transacted out-of-state without a broker of record before and I didn't have any issues. I probably won't have any issues in the future either.
Risky. Unlicensed activity often gets reported by buyers, sellers, and competitors. Regulators also do their own proactive reviews of transactions in the marketplace in order to find violations and unlicensed activity. Inevitably, performing brokerage activities in a state where you're unlicensed will eventually catch up with you and result in severe penalties.
Still Have Questions?
Submit your questions in the form, we'll get back to you within an hour.