The Maryland Real Estate Commission's (MREC) mission is to protect the health, safety and welfare
of the public through its examination, licensing, and regulatory
activities regarding real estate brokerage services.
We hope the following information is helpful.
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Understanding Whom Real Estate Agents Represent
DEALING WITH QUALIFIED REAL ESTATE PROFESSIONALS
Buyers and sellers of property should make
certain that real estate professionals with whom they deal
are both qualified to offer brokerage services and are licensed
by the Maryland Real Estate Commission. If someone is asking
you to pay them a fee of any kind for assisting you in selling
your home, or buying a new one, he or she must be licensed
by the Maryland Real Estate Commission. You can find licensees
under "Find Who Is Licensed." If a person's name
is not listed, he or she is not licensed to provide real
estate brokerage services in the State of Maryland. A person
must hold a Maryland real estate license to provide brokerage
Under provisions of the Maryland Real Estate Brokers Act, MREC's jurisdiction extends to real estate
brokers, associate brokers and salespersons and unlicensed
persons engaging in real estate brokerage activities.
If you have a problem with a licensee, you should contact his or her branch office manager or the licensed
broker of the company for assistance.
TIPS FOR CONSUMERS
All contracts to list, buy or sell a property must be in
writing, have a beginning and an ending date, and be signed
by all parties to the contract. You must receive a signed copy.
Many real estate transactions involve real estate agents
representing the seller and the buyer. The roles and responsibilities
of the agents are described in a form prepared by the Commission
entitled Understanding Whom Real Estate Agents Represent.
A completed copy of this form must be furnished to you by
one or both of the agents. Read the document carefully and
ask for clarification of any parts you do not understand.
Ask questions and be sure that all terms that you agree
to are in writing before you sign any documents. Do not
sign any blank documents. If you do not understand the documents,
contact an attorney for assistance. If English is your second
language and you are unclear about the terms of the contract,
contact an interpreter to assist you prior to signing.
Be aware that it is illegal for an unlicensed contractor/handyman
to do any home improvement work for a fee without holding
a license through the Maryland Home Improvement Commission.
This may affect work that you have completed as a seller
or as part of a home inspection addendum in your contract.
Ask for a MHIC license number and verify its owner, status
and complaint history prior to signing any contracts.
There are no rules governing when a seller must accept any
offer to purchase, nor are there requirements as to which
offer or counter-offer a seller must accept, if any, for
his or her property. You have the right not to sell your
property if you so choose as long as your intent is not
to promote discriminatory practices. However, a commission
may be payable to the licensee if an owner decides not to
sell in the face of a ready, willing and able buyer, depending
on the terms of your listing agreement.
As a potential buyer, if you give an earnest money deposit
to be held by the Broker, it must be held in a separate
trust account and cannot be commingled with other business
and/or personal accounts. Your check and/or money order
should be made payable to the brokerage company, not the
agent or employees.
Real estate agents and brokers are prohibited from engaging
in the practice of law and may not give legal advice to
buyers or sellers.
Effective 1/1/2008, all home inspectors in Maryland must
be licensed. Ask to see their license before using their services.
FILING A COMPLAINT
Out of some 48,000 real estate licensees in Maryland, the
vast majority receive no complaints. On occasion, however,
problems arise during a transaction. A formal complaint
can be filed. The complaint must be in writing, made under
oath, state the amount of the loss claimed, if any, state
the facts on which the claim is based, and include any documentation
or evidence that supports the claim against a licensee.
Complaints that include a claim against the Guaranty Fund
must be based on an act or omission that occurs in the provision
of real estate brokerage services by the broker, associate
broker or salesperson or an unlicensed employee of a licensed
real estate broker. It must involve a transaction that relates
to real estate that is located in the state of Maryland and
be based on an act or omission in which money or property
is obtained by theft, embezzlement, false pretenses, forgery
or constitutes fraud or misrepresentation. The maximum amount
of a claim is $25,000. This must be the actual out-of-pocket
loss, not the anticipated loss or expense. Punitive damages
are not awarded (i.e., pain and suffering). Commissions (paid
or received) are not eligible for a Guaranty Fund claim.
The complaint form to be submitted can be downloaded.
You may check "Disciplinary
Actions" to see if there is a record of disciplinary
actions against the licensee from previous business dealings.
Other Agencies: Questions and concerns that are related
to the sale of property sometimes fall within the legal jurisdiction of agencies other than the MREC.
MD Division of Financial Regulation
Information concerning mortgage broker regulations and licensing requirements
MD Real Estate Appraisers & Home Inspectors
Information concerning home inspector and real estate appraiser regulations and licensing requirements
MD Insurance Administration
Answers to questions regarding homeowners insurance, title insurance and related services
MD Home Improvement Commission
Inquiries about license status and advice on filing complaints
MD Division of Occupational and Professional Licensing
Assists you in accessing the various Maryland State agencies we mention in this brochure.
Dept. of Housing & Urban Development
Attorney General's Office
Consumer Protection Division
The Maryland Real Estate Commission is a member of the
Association of Real Estate License Law Officials
Maryland State Department
of Assessments and Taxation
Maryland Higher Education Commission
Attorney General - Homebuilder Registration
Attorney General - Landlord/Tenant Laws
Maryland Commissioner of Financial Regulation
Maryland Insurance Administration
For complaints against title companies.
WET SETTLEMENT PROCEDURE ACT
The Commissioner of Financial Regulation is becoming aware of a growing
trend among mortgage lenders to delay funding of purchase money mortgages beyond the loan closing.
Licensees are reminded that Maryland law requires lenders to disburse the proceeds of purchase money loans on or before
the closing date in accordance with the loan documents, to the agent responsible for settlement. This is the basis
of a "wet settlement." The practice of requiring a borrower to sign closing documents and actually delay
funding the loan is not permitted.
The Annotated Code of Maryland, Real Property Article §7-109(b) specifically states:
"In any consumer loan transaction in which the loan
is secured by a purchase money mortgage or deed of trust
on real property located in this State, on or before the
day of settlement, the lender shall disburse the loan proceeds
in accordance with the loan documents to the agent responsible
Loan proceeds must be disbursed in the form of cash, wired funds, certified check, teller's check,
cashier's check or a check issued by a political subdivision or on behalf of a governmental entity
(refer to the law for permitted forms).
The Office strongly encourages lenders to consult with their
legal counsel to confirm that the appropriate departments
comply with this law. Any lender failing to comply with
the disbursement requirement under the statute may not charge
interest on the loan for the first 30 days after the settlement
A LICENSEE MAY NOT REQUIRE A BUYER TO USE A SPECIFIC
LENDER OR SETTLEMENT COMPANY AS A CONDITION OF SETTLEMENT
The Real Estate Commission has received several complaints
recently about salespersons who attempted to require a buyer
to use a specific lender or settlement company. These complaints
involved the sale of new homes as well as the sale of existing
homes. Section 17-607 of the Maryland Real Estate Brokers
Act states that, in a real estate transaction involving
a single-family dwelling, a licensee may not require a buyer,
as a condition of settlement, to employ a particular title
insurance company, settlement company, escrow company, mortgage
lender, or title lawyer. The only exception is that a seller
may not be prohibited from offering owner financing as a
condition of settlement. Violation of this provision of
the law is a misdemeanor crime, and could lead to a fine
not exceeding $5,000, imprisonment not exceeding one year,
or both. Under Section 17-322(b)(29), these actions could
also be the basis of a disciplinary action before the Commission
which could result in the suspension or revocation of the
license and/or a fine of up to $5,000.
Maryland Real Estate Commission
500 North Calvert Street, Room 300
Baltimore, MD 21202-3651
Phone: (410) 230-6230
Maryland toll-free: 1-888-218-5925