Credentials: What is a Realtor®?

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A Realtor® is an individual licensed to list and sell real estate, one who is also a member of a local Board of Realtors®, the State Association of Realtors® and the National Association of Realtors®. As a member of these three professional trade associations, a Realtor® is bound by a strict Code of Ethics, the canons of professional behavior that guide daily activities in the real estate business.

A Realtor® pledges fidelity to clients, but also pledges to treat fairly all parties to a real estate transaction. A Realtor® is knowledgeable about various aspects of the real estate profession and maintains current information regarding market conditions. Realtors® have an affirmative obligation to serve property owners and prospective buyers to the best of their ability.

A Realtor® is the recognized professional in real estate. The distinctive Realtor® "R" is your guarantee that you are dealing with the elite of the profession, a member of an association of Realtors®, a professional who deserves your trust: a Realtor®.

Membership Categories in the Honolulu Board of Realtors®
The various options for membership in the Honolulu Board of Realtors® are as follows:

• Realtor® Member: Licensed real estate brokers and licensed or certified appraisers who are associated with an established real estate office in the state of Hawaii.
• Realtor-Associate® Member: Licensed real estate sales persons and licensed or certified appraisers who are affiliated with a Realtor® member.
• Affiliate Member: This category is for individuals or firms who, while not engaged in the real estate profession, have interests requiring information concerning real estate and are supportive of the Board's objectives. Individuals licensed or certified to engage in the practice of real estate who do not elect to hold Realtor® or Realtor-Associate® membership in the Board may join in this category, provided they are engaged exclusively in a specialty of the real estate business other than brokerage of real property.
• Other Membership Categories: These include Institute Affiliate, Public Service, Secondary, Honorary and Student. For more information about these categories of membership, please contact the Board.

Licensure Requirements to Sell Real Estate in Hawaii
To become a licensed real estate professional in Hawaii, you must be 18 years old and either a U.S. citizen or a registered alien by the State exam date and have a reputation for honesty, truthfulness, financial integrity and fair dealing. Licenses expire at the end of even-number years and the application fees for both the salesperson's and broker's licenses are $185 in even numbered years and $255 in odd years. The steps to obtain the two types of licenses are outlined below.

To obtain a salesperson's license, you need to complete the State-required 40-hour prelicensing course. A list of approved prelicensing schools can be obtained from the Hawaii Real Estate Commission (REC); tuition varies by school (about $135 and up). Upon successfully completing the course, register with Assessment Systems, Inc. (ASI) to take the State exam ($50 exam fee). If you pass the State exam (you'll know the same day), you'll have 90 calendar days from the exam date to submit an application for your license.

To obtain your broker's license, you must have a current (active or inactive) Hawaii salesperson's license. Also, you must have a minimum of 2 years full-time real estate experience in Hawaii and have participated in at least 10 qualifying real estate transactions with a Hawaii broker prior to taking the State-required 46-hour broker's prelicensing course (tuition varies by school, $350 and up). Obtain an Experience Certificate ($50 application fee) prior to registering for the State exam. Licensure after passing the exam is the same process as for salespersons.

Hawaii has no reciprocity with other states or countries, but an agent with an active license in another state may qualify for an Education Waiver. Contact the REC to find out the qualifications for all such waivers. If you plan to do business as a corporation, partnership or sole proprietorship, there are additional steps to take (business registration, licenses, etc.).

Note: Licenses are renewable at the end of each even-numbered year. There is a 10-hour continuing education requirement for license renewals for the majority of licensees. The REC is located at 250 South King Street, Suite 702, Honolulu, Hawaii 96813. For application forms or additional information, call 808-586-3000. Answers about licensing questions can be obtained at 808-586-2643. School information at 808-586-2645 and you can reach ASI at 1-800-274-7301.

Commissions on Real Estate
Simply stated, a real estate broker is a person who brings together two or more parties for the purpose of selling or leasing real estate. Payment for selling or leasing is commonly referred to as "commission".

In order to earn a commission, brokers must find a purchaser ready, able, and willing to buy the property. Additionally, they must see that the prospect pays the required money and executes the required notes and mortgages or at least signs an acceptable contract. The broker must also pursue the negotiations to a successful conclusion, unless he is prevented by a default of the seller or buyer. The mere fact that a broker first approached the customer or showed the property does not entitle the broker to a commission, if another broker was the procuring cause of the final sale. If the relationship between the buyer and the broker has been terminated because the broker has abandoned the negotiations, or if the broker's actions have caused the buyer to lose faith in the broker, the chain of events may be broken that would have otherwise made that agent the procuring cause.

A real estate commission is then the price a seller pays to have a broker market property and bring in a capable buyer. On the other hand, a real estate commission can also be paid to a broker by a buyer, if the buyer wishes to compensate a broker for finding a suitable property. In the case of a "buyer's broker", the broker negotiates on behalf of the buyer, trying to get the property at the price most attractive to the buyer. This is a relatively new concept in residential real estate, and the terms of the employment agreement between the buyer and real estate broker should be carefully spelled out to avoid confusion.

If there is a dispute regarding the payment of a real estate commission, the parties to the dispute may come to the Honolulu Board of Realtors® for resolution of the dispute. There are procedures for invoking the arbitration facilities of the Board, and there are also provisions for mediation of commission disputes. Brokers and cooperating brokers, brokers and sellers, and even brokers and buyers may come to the Board for arbitration.

Real estate commissions are no more than the payment for services rendered. A broker negotiates with a seller or a buyer on an individual basis to determine the level of service desired by the person hiring the broker. There is no standard commission, no pre-set commission rate, and no industry regulation regarding commissions. Each homeseller or homebuyer deals with the Realtor® individually to decide upon the worth of a real estate service, and the amount of compensation to be paid upon performance.