Being an Estate Agent is not without its responsibilities and the Business Plan Proprietor (BPP) is required to comply with state licensing, registration and record keeping laws. The Act requires an estate agent to have a Professional Test of Ability (PTA), a Prescriptive Test of Ability (PTAQ) and an International Proprietors License (IPL). In addition, state statutes require each estate agent to keep a State Broker's Certificate in a readily accessible location in the name of the estate agent.
Under the Act, a Test of Ability, as defined by the Act, is a written test requiring that an agent pass a comprehension of the Act and its implementing rules, the provisions of the Uniform Fiduciary Service Act and its implementing rules, the laws of this state and the laws of other states governing the trade of estate liquidation. Once an agent has successfully completed a Test of Ability and PTAQ, he or she must then take the Prescriptive Test of Ability, which is administered by the National Association of Estate Agents (NAEA).
BPP agents should note that a Test of Ability does not set the bar for licensure, although several states require their agents to pass. A Test of Ability is usually administered annually for the first two years and annually thereafter. After the Test of Ability is administered annually, a Prescriptive Test of Ability is given annually, beginning one year following the end of the Test of Ability.
To qualify for licensure, a home sale representative must maintain a minimum BPP of one hundred seventy-five dollars per year. This amount increases if the home sale representative is an independent agent. The minimum required amount of money is determined by the state, although many states require a certain percentage of the commission to be kept in a trust account.
Traditionally, agents receive the gross proceeds of a sale, minus any commission paid to them, as a direct deduction from the selling price of the property being sold. The Federal estate tax and most state sales taxes are calculated based on a percentage of the selling price. For instance, if the selling price is fifty dollars, the Federal estate tax and all state taxes are computed on the basis of forty percent of the selling price.
For the federal estate tax, a seller's gross proceeds are determined based on the date of death. This amount is generally then subtracted from the selling price to arrive at the selling price for the property being sold. The remaining amount of the property's price is then taken from the trust account.
A percentage of the gross proceeds is kept in the trust account, which is put into a separate account. In some states, the proportionate holding is subject to a state sales tax. If there is no state sales tax, the percentage of gross proceeds that is kept in the trust account is kept in a separate account that is separate from the state's sales tax.
The Trusts Trust account keeps the percentage of gross proceeds in an account that is segregated from other accounts and investment holdings. This account is administered by the estate agent who has authority to spend the money on any transaction that is permitted by the Act.
When the estate agent sells the property, the funds in the trust account are divided up by the state's statute for distribution among beneficiaries of the estate. If the state is unable to distribute the funds, the estate agent is required to sell the property for his or her own account and divide the proceeds amongst the beneficiaries of the estate.
Other proprietor registration issues that may arise include conducting regular ongoing inspections of the property being sold to check for defects and issues, and making copies of all contracts and correspondence with the seller. The seller is also required to disclose all liens, encumbrances, accounts, public records and records that can affect the sale.
It is not uncommon for estate agents to have to deal with different local government agencies, including licensing requirements, business licenses and zoning restrictions. While this will not stop the agent from doing business, it can create unnecessary inconvenience. Most local governments require licenses and require that the agent provide a bond as a condition of their permission to conduct business in their areas.
Under the Act, a Test of Ability, as defined by the Act, is a written test requiring that an agent pass a comprehension of the Act and its implementing rules, the provisions of the Uniform Fiduciary Service Act and its implementing rules, the laws of this state and the laws of other states governing the trade of estate liquidation. Once an agent has successfully completed a Test of Ability and PTAQ, he or she must then take the Prescriptive Test of Ability, which is administered by the National Association of Estate Agents (NAEA).
BPP agents should note that a Test of Ability does not set the bar for licensure, although several states require their agents to pass. A Test of Ability is usually administered annually for the first two years and annually thereafter. After the Test of Ability is administered annually, a Prescriptive Test of Ability is given annually, beginning one year following the end of the Test of Ability.
To qualify for licensure, a home sale representative must maintain a minimum BPP of one hundred seventy-five dollars per year. This amount increases if the home sale representative is an independent agent. The minimum required amount of money is determined by the state, although many states require a certain percentage of the commission to be kept in a trust account.
Traditionally, agents receive the gross proceeds of a sale, minus any commission paid to them, as a direct deduction from the selling price of the property being sold. The Federal estate tax and most state sales taxes are calculated based on a percentage of the selling price. For instance, if the selling price is fifty dollars, the Federal estate tax and all state taxes are computed on the basis of forty percent of the selling price.
For the federal estate tax, a seller's gross proceeds are determined based on the date of death. This amount is generally then subtracted from the selling price to arrive at the selling price for the property being sold. The remaining amount of the property's price is then taken from the trust account.
A percentage of the gross proceeds is kept in the trust account, which is put into a separate account. In some states, the proportionate holding is subject to a state sales tax. If there is no state sales tax, the percentage of gross proceeds that is kept in the trust account is kept in a separate account that is separate from the state's sales tax.
The Trusts Trust account keeps the percentage of gross proceeds in an account that is segregated from other accounts and investment holdings. This account is administered by the estate agent who has authority to spend the money on any transaction that is permitted by the Act.
When the estate agent sells the property, the funds in the trust account are divided up by the state's statute for distribution among beneficiaries of the estate. If the state is unable to distribute the funds, the estate agent is required to sell the property for his or her own account and divide the proceeds amongst the beneficiaries of the estate.
Other proprietor registration issues that may arise include conducting regular ongoing inspections of the property being sold to check for defects and issues, and making copies of all contracts and correspondence with the seller. The seller is also required to disclose all liens, encumbrances, accounts, public records and records that can affect the sale.
It is not uncommon for estate agents to have to deal with different local government agencies, including licensing requirements, business licenses and zoning restrictions. While this will not stop the agent from doing business, it can create unnecessary inconvenience. Most local governments require licenses and require that the agent provide a bond as a condition of their permission to conduct business in their areas.
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