The Pennsylvania Real Estate Commission is an important entity to be familiar with if you are a real estate agent in Pennsylvania.
According to the Pennsylvania Department of State, the Pennsylvania Real Estate Commission is the group that:
“grants and renews licenses to persons who bear a good reputation for honesty, trustworthiness, integrity and competence to transact the business of broker, salesperson, cemetery broker, cemetery salesperson, campground membership salesperson, time-share salesperson, builder-owner salesperson or rental listing referral agent, in such a manner as to safeguard the interest of the public.
In short, this is the group of people who evaluate your applications and decide if you can be granted a real estate license or not.
What does the Pennsylvania Real Estate Commission do?
Across the country, there are safeguards and laws in place regarding real estate in order to protect the public (the people who are buying/selling real estate) as well as the real estate agents. The Real Estate Commissions of each state are the ones who administer and enforce these laws to ensure that all transactions are being completed according to law, and they are also in charge of making sure each real estate agent is properly licensed.
In other words, if you are partaking in or completing real estate transactions without the proper license, the Real Estate Commission is the one who will track you down and revoke you of your license.
Real Estate Commissions are divided by states because each state has different real estate laws and practices. For example, some states only allow lawyers to create documentation to transfer real property, while other states also allow the licensed real estate agent. Each real estate commission is in charge of enforcing those laws and practices. The Pennsylvania Real Estate commission laws and regulations are available to view on their website.
Although the Pennsylvania Real Estate Commission does enforces the real estate regulations, the commission is not allowed to provide legal advice or advisory opinions or advise anyone on how the commission would vote in a political election. If you need legal advice, you are advised to get a private lawyer or attorney.
They are also in charge of setting all the requirements and standards that must be met in order to obtain a certain license in the real estate field. And on the other side of that, all schools or companies that wish to offer Pennsylvania pre-license or furthering education courses for real estate must be approved by the Pennsylvania Real Estate Commission in order to be valid.
The Real Estate Commission also receives complaints filed by the public if they believe a licensed agent has done something “unethical, immoral, below an acceptable standard of practice or out of the scope of the profession.” This is a way to help the Commission to investigate anyone abusing the power of their license or not abiding by the standards of the Real Estate code of conduct.
Who is a part of the Pennsylvania Real Estate Commission?
To see a list of the current members of the Pennsylvania Real Estate Commission, you can visit the Pennsylvania Association of Realtors website. The quorum requirements include:
- 6 Real Estate Brokers (1 Cemetery Broker)
- 3 Public Members
- 1 Consumer Protection member
- 1 Commissioner
Examples of typical members of a Real Estate Commission would include partners or managers of a real estate firm, a certified real estate continuing education teacher, served on a task force, or helped to pass/create housing legislation in the government. Members are appointed by the current state governor.
How does the Pennsylvania Real Estate Commission make decisions on licensure?
Real Estate Commission members must have a very solid knowledge of the laws and regulations that come along with their field or specialty in real estate.
When considering whether to approve an application for a license, the commission will usually make sure you have met all the requirements, have all the necessary documentation, and that everything checks out.
One of the main aspects that the Commission has to come to a decision on is if you are applying for a license and you have committed a felony. If you have committed a felony and you are applying for a license, you will need to provide extra documentation for the Committee to review. According to the Pennsylvania Association of Realtors, “More times than not, the conviction will not block access to a license.” The hard part is, there is no guarantee that you will receive your license until your application is submitted.
So that’s the PREC — But what is a real estate commission?
One of the main ethical debates in the field of real estate is a fair commission. Most real estate agents get paid on commission, so as an agent, your commission is your main source of income. In order to get paid, you have to make sales. And part of your commission is going to be split with your brokerage.
The average real estate commission split between agent and brokerage in Pennsylvania is 6%. So how would that work exactly? Let’s break it down for you. Say you sell a $200,000 home and you get a 6% commission split. That 6% is the first split between the buying and selling agent. That leaves you with 3%, which means you will get $6,000 from the sale. Then, unless you are an independent broker or agent, you will have to share that with your broker. If you’re on a 60/40 commission split that means you take home 60% of that $9,000, or $3,600. That is is before expenses and taxes.
Now the commission split is agreed upon by the broker and the agent, but the broker must abide by the standards set by the Pennsylvania Real Estate Commission. This split usually reflects the level of services and support the broker provides. It can also reflect the volume of business the agent brings in. If you are a real estate agent and you believe your performance or services deserve a higher commission split, you can negotiate with your supervisor.