HISTORY AND PURPOSES OF REAL ESTATE LICENSE LAWS As long as there has been land, there have been people selling the land. As long as there have been people selling the land, there has been cheats, crooks, and con artists. This has given genuine real estate agents a bad rap. They have been thrown into the same category as shady used car salesmen or pushy loan sharks that will do anything to make the sale happen. Real estate licensing laws and regulations have been established to help make sure that each licensed agent is trained in their field and upholds a high ethical standard. This has gone a long way to turning the real estate sector into a field of trusted professionals. One primary reason why it was necessary to train and license all real estate agents was Caveat Emptor.
CAVEAT EMPTOR When a seller is only focused on selling a property at all costs, you have a situation of Caveat Emptor. Caveat Emptor is a Latin expression meaning “let the buyer beware.” It means that the buyer is on his or her own and the seller cannot be relied upon to honestly disclose the true condition of the property. Well, governments saw how this posed a risk to buyers and stepped in to remedy the situation. They created the intermediary sales agent to help protect buyers. Governments created regulations that required sellers to complete mandatory disclosure forms. And they trained licensed agents to work on behalf of the buyer to protect their interests from the seller.
CONSUMER PROTECTION While licensed real estate agents are trained to protect buyers and sellers from each other, it was also necessary to protect the public from unethical and dishonest agents.. Thus, governmental regulatory organizations were set up to oversee and mandate the actions and activities of the real estate profession.
FEDERAL AND STATE REGULATORY AGENCIES Licensing and regulation of real estate agents are handled at the state level. Every state has a department that licenses and regulates all the businesses and professionals which is under the executive branch of the Governor. These state agencies wield a great deal of power. 3|Page
