Place of Business Requirements
In the post-Covid world, flexibility in where one physically works has become common-place. Employees and businesses in every industry sector have moved to some form of flexible, hybrid or fully remote working space. Research varies on how productivity improves or worsens at home, that is largely dependent on the individual to know themselves and their work habits to make a good decision. REALTORS® often set their own hours and have different schedules depending on the day, so it is natural for their work to rarely bring them to a physical office.
Virginia law however requires every resident real estate broker to maintain a place of business in the Commonwealth, and no place of business shall be in a residence unless it is separate and distinct from the living quarters of the residence with its own entrance and is accessible by the public.
With real estate agents and salespersons working remotely and infrequently meeting clients in offices, the requirement for brokers to maintain brick-and-mortar businesses has become antiquated. NVAR supports relaxing the Virginia Real Estate Board Licensing regulations to allow greater flexibility in the physical location of real estate place of business.
Supervising Broker License
Brokers in charge of other licensees and managing them as supervising brokers, should be subject to additional licensing and education requirements to ensure they can perform all supervisory duties. The education requirements for a Virginia Real Estate Broker License is a good start, but not all Broker License holders are prepared to supervise and manage other licensees. The Virginia REALTORS®, recognizing a need for additional education and training, have established the Broker Premier Certification, designed to expand the knowledge of supervising and managing brokers to allow them to successfully manage and operate a real estate office.
The results of this certification program are great, and the program should be expanded from a voluntary certification to a mandatory licensing requirement for supervising brokers. NVAR recommends legislation establishing a separate license for supervising brokers encompassing the coursework (or equivalent) of the Virginia REALTORS® Broker Premier Certification.
Regulating Real Estate Wholesaling
In wholesale real estate transactions, the wholesaler enters a purchase contract for a home from a seller, for a small earnest money deposit. The contract spells out the amount the wholesaler will sell the property for and the required time period for the sale. After the wholesale real estate contract is in place, the wholesaler attempts to find an interested investor. Once found, they reassign the contract to the investor at an agreed upon higher price. The difference in prices is known as the wholesale fee and is how the wholesaler profits on the transaction.
Wholesalers may target distressed properties that the owner doesn't want to spend time or money on, but oftentimes wholesalers prey upon individuals who are unaware of the real estate market and the actual value of their property. Wholesaling has generated complaints about misleading sales tactics, predatory contracts and clouding title to properties. The practice of wholesaling is becoming more common in Northern Virginia and across the Commonwealth. The Virginia Code does not define wholesaling as a real estate activity and as a result, licensees who engage in wholesaling are doing so without legal guidance and unlicensed individuals are able to engage in the practice without being subject to same laws and regulations as other real estate professionals.
NVAR supports legislation to define wholesaling as real estate activity. Requiring wholesalers to obtain a license and abide by the same laws and regulations as other real estate professionals will help increase accountability and protection for the public and provides a legal framework to protect REALTORS® and their clients from liability.