Ken ButlerParticipant2 months, 1 week ago
Is Florida a Physical Location State.
I am a Broker in South Carolina and have been for 50 Years. I have a client that wants to Buy a large tract of land in Florida and has given me the assignment. I located the land on the Internet but I have not Physically inspected it nor will I go with the client when he inspects it. All of my involvement will be by way of Telephone and emails to Listing Broker. It appears that the client wants to make an offer on the property, so I called Listing Broker in Florida and he informed me that the Law Prohibits him paying me a commission because I do not have a Florida License. I have sold and closed many properties in Florida under the same guidelines as above and this has never come up before, and I was paid a commission. I was always of belief that as long as I personally never set foot in Florida with the client and all showings were conducted by the Listing agent that I could be paid a commission by the Listing Broker under the Physical Location Heading, since there is no Reciprocity Agreement (Cooperative State) between Florida and South Carolina and also since Florida is not classified as a TURF State. Am I correct with my belief that I can collect a commission under The Physical Location State definition. Thank You for any direction that you can Provide –
What Is Real Estate License Reciprocity?
Real estate license reciprocity is an agreement between multiple states allowing real estate agents licensed in one state to be licensed in reciprocal states without taking local real estate pre-licensing courses. Reciprocity is state-specific, with some states requiring full re-examination, some requiring limited examination, and others flatly denying reciprocity to out-of-state licensees.
This means that a reciprocity agreement doesn’t necessarily allow a real estate salesperson or broker can take part in real estate transactions in a reciprocal state without getting a license in that state. For that, you need to understand the state laws for real estate license portability.
For example, if you have a New York State real estate salesperson’s license, you can apply for and get a Connecticut real estate salesperson license without taking the coursework required for licensure in Connecticut. You would, however, still need to take the Connecticut state portion of the exam. Keep in mind, however, that specific requirements vary from state to state.
What Is Real Estate License Portability?
Real estate license portability describes state laws allowing out-of-state real estate agents to engage in real estate transactions in their state. In general, there are three kinds of portability laws: cooperative, physical location, and turf states. Each of these classifications requires different circumstances under which an out-of-state real estate agent may work within the state.
There are three major classifications of real estate license portability:
1. Cooperative State
Cooperative states allow out-of-state real estate agents or brokers to physically enter the state to conduct real estate business. This includes property showings, closings, negotiations, and other stages of real estate transactions. However, in order for out-of-state agents to work in a cooperative state, they must have a co-brokerage agreement with a licensee of that state.
There are 24 cooperative states, including Alabama, Colorado, and Washington. Keep in mind, however, that some cooperative states, like Michigan, place limitations on out-of-state agents. So, you should always familiarize yourself with local requirements before committing to a client looking for property in a cooperative state.
2. Physical Location State
A physical location state allows agents and brokers to conduct business in another state but doesn’t allow them to enter the state for the purpose of conducting real estate business. This means that an agent or broker from another state must conduct all out-of-state business remotely and may not enter the state for showings, closings, or any other reason.
For example, in a physical location state, you can send your clients to view properties, submit offers on their behalf, and negotiate transactions as long as you physically remain in the state in which you are licensed. There are 21 physical location states, including Florida, Illinois, and Massachusetts, plus the District of Columbia.
3. Turf State
A turf state does not allow out-of-state agents or brokers to conduct any business in their state, either in-person or remotely. The only option to work with clients in a turf state is to refer them to a licensee of the turf state. There are six turf states: Kentucky, Missouri, Nebraska, New Jersey, Pennsylvania, and Utah.
If you have a lead who wants to buy or sell property in a turf state, your options are limited. If you work with a brokerage that has offices in multiple states, simply refer your client to someone in the appropriate turf state office.
Real Estate License Portability: Physical Location
Real Estate License Reciprocity: Florida has mutual recognition agreements with the following states:
Rhode Island1 Reply
Kiah TreeceModerator2 months, 1 week ago
Thanks for your question, Ken. For the most up-to-date information regarding out of state real estate agents in Florida, visit the Florida Department of Business & Professional Regulation (DBPR). They can connect you with someone at the Florida Real Estate Commission who can determine the commission you may earn as a South Carolina broker.
Best of luck,