A surety bond is a legal tool commonly used by federal, state, or local regulatory authorities to encourage lawful and ethical behavior by businesses.
In this case, a real estate broker bond protects your customers and the state in which you operate from harm caused by any potential misconduct in how you run your business.
In the event that a claim is made and upheld, any damages can be paid up to the total amount of the bond. You will then be expected to repay that amount to the issuer of the surety bond.
Rates for broker bonds will vary and are based on several factors, including your credit score and the amount of the bond.
In general, annual premiums can range from 1% to 15% of the total bond amount required in your state. You are likely to receive a lower rate if you have good credit and do well on other measures, such as personal and business financial statements.
Below is a list of the states in which NNA Surety Bonds offers policies for real estate brokers.
* Cost can vary depending on the bond amount required and your credit rating
Some states require you to post a real estate broker bond in order to be licensed to do business. In addition, a surety bond helps protect your clients and the state from unlawful or unethical behavior by your agency.
Should your agency violate a state law or regulation, a claim can be made against your bond in order to pay any losses your client has suffered.
Real estate brokers are generally held to a higher standard of knowledge than real estate agents, though rules do vary among states. In California, for example, a real estate broker's license is required if you work for yourself. And if you're a real estate agent, you must work for a broker.
Real estate broker license requirements vary by state, but can include:
To get started, check your state's regulations to verify licensing requirements for real estate brokers in your area. Or, give our bond specialists a call at 855-215-2160.