Top 5 Real Estate Broker Questions and Comments

When I became a real estate broker and I would introduce myself to people, the first thing most people assume is that I work for a specific developer, or I will be working in a mall handing out flyers. Anyway just to provide some clarity, here are the top 5 questions I get and the answers. Note that developers may have their own specific ways of doing things, also this is based on my existing knowledge of the industry, and most info below is a generalization to easily grasp the concepts.

1. Brokers and salespersons and agents the same?

According to the Real Estate Service Act of the Philippines, Republic Act No. 9646 (Also fondly called RESA Law) other than a Real Estate Consultant and Real Estate Appraiser, "Real estate service practitioners" shall refer to and consist of the following:

"(4) Real estate broker - a duly registered and licensed natural person who, 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 the sale, purchase, exchange, mortgage, lease or joint venture, or other similar transactions on real estate or any interest therein."

"(5) Real estate salesperson - 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."

So in simple terms:

  • Real Estate Broker
    • Registered and Licensed - meets requirements for educational units, takes the exam and get's a licence from PRC.
    • Receives a professional fee, commission or valuable consideration - broker receives fee and actually is the one that pays direct report real estate salespersons for their work
    • Acts as an agent - so yes brokers are agents and help to perform the functions listed above.
    • It is important to note that brokers perform much more functions than salespersons below since salespersons are focused pretty much on selling.
  • Real Estate Salesperson
    • Duly accredited - meets requirements for educational units, and gets accredited under a licensed real estate broker through PRC
    • Note: salespersons report to brokers.
    • Note: A maximum of 20 salespersons can be accredited under a licensed real estate broker.
    • Note: A salesperson is also an agent as salespersons "performs service for, and in behalf of. a real estate broker"

2. Which developer do you work for?

Depending on the path a broker wants to take the broker's scope varies:

  • In house - in scope is only on one developer and the developer's projects. They generally also focus on the primary market (new products of developers).
  • Freelance - in scope are all developers if they want to get accredited with selected developers for the primary market as well as delve into the secondary market (resale). By accreditation this means that the broker is has fulfilled the minimum requirements of the developer which includes documentation and training. Brokers may be accredited with many developers as long as they comply with the requirements for accreditation. 
  • Brokerage firm - brokers can also work for a brokerage firm (company) or setup their own and as such scope is the same as a Freelance broker.

I have accredited myself with a number of developers.

3. Do you work in the mall?

The people you see in the mall could be one of the following:
  • In house brokers - there are brokers who choose to focus on one developer and as such may join in-house with a developer, as such they typically have booth manning hours
  • In house salespersons - there are sales persons who like brokers want to focus on a specific developer also.
  • Freelance brokers - from time to time given availability in slots brokers who are accredited with developers may be given booth manning hours as well. Brokers also handle the secondary market and for the most part they are out in the field also in addition to the mall. It depends on what freelance broker wants to focus on. 
  • Brokerage firms - On a case to case basis may request support from a developer in case they focus on a specific project to setup a booth in the mall.

4. You must earn a lot!

Well depending on the path a broker may take and how hardworking they are just like any job you can make it but then compensation varies.  But in general see below to work as

  • In house - compensation may come in form of allowance, and commission 
  • Freelance - pure commission. This is where I started. Everyday is an "abono day" (out of pocket expenses days). 
  • Part of a brokerage firm - depending on how it is setup it can be a mix of allowance, salary, and commission

Commission doesn't increase depending on the number of broker's involved in a transaction. Brokers just split the commissions and brokers subsequently pay their respective salespersons involved in the sale.

Real estate transactions do take time. A lot of time! Since the there is a large consideration on the client's part is important to always put the client first to help them meet a need or solve a problem. Commissions are secondary to doing a good job to help the client.

5. Your work must be easy since you just sell.

Selling is only part of it. Depending on the complexity of the service being provided, as well as the property involved, brokers must at least have knowledge in the following as prescribed by the RESA Law. 

    • (c) For real estate brokers - 
      • fundamentals of property ownership; 
      • code of ethics and responsibilities; 
      • legal requirements for real estate service practice; 
      • real estate brokerage practice; 
      • subdivision development; 
      • condominium concept; 
      • real estate finance and economics; 
      • basic principles of ecology; 
      • urban and rural land use; 
      • planning, development and zoning; 
      • legal aspect of sale, mortgage and lease; 
      • documentation and registration; 
      • real property laws; 
      • and any other related subjects as may be determined by the Board.

    In addition to above brokers are also knowledgeable to about:

    • Philippine Geography or location where they focus on
    • Appraisal
    • Social Media Marketing
    • Search Engine Optimization
    • Laws on succession and donation
    • Selling
    • Current trends and events around real estate

    On the practical side brokers work with various agencies, people depending on the need. Below is a sample of the people that a broker may work with and is not an all inclusive list.

    • Clients
      • Buyers
      • Lessees
      • Sellers
      • Lessors
      • Companies
      • Farmers
    • Partners
      • Other Brokers
      • Developers
      • Salespersons
      • Appraisers
      • Consultants
    • Government/Judicial
      • Assessor
      • BIR
      • Registry of Deeds
      • Barangay
      • Regional Trial Courts
      • Small claims court
      • Police
      • LGU and other government agencies where needed
    • Project related
      • Security
      • Condominium corporation
      • Home owner's association
      • Property Management Office
    • Banks

    On a given day a broker maybe typically doing any or all of the following:

    • Working with sellers/lessors on listings
    • Working with buyers/lessees on requirements
    • Marketing listings/requirements
    • Matching/Searching listings and requirements 
    • Property viewing / Tripping
    • Negotiations
    • Contracts
    • Documentation
    • Working with various real estate practitioners and the various support groups and agencies
    • And a whole lot more

    That easy?