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What is Commercial Real Estate?

Raman Gakhal in a still from a Video Tutorila explaining the importance of Commercial Real Estate Licensing in Alberta.

The Commercial Real Estate Licensing in Alberta is at a booming stage again after COVID’s suppression. The Summer Re-opening Project in Alberta is a taking up heights even in the Real Estate Industry. Commercial Business Owners are coming up with innovate solutions of redevelopment and improvisations to modernize their office spaces to offer better facilities once things are back to normal. Office owners are getting pro-active to surge the market for their upcoming commercial clients.

David Routledge, The VP of Real Estate Management for Western Canada suggests that the culture of working in an office space can never be completely dead and quoted,

“It’s just the way many people work. Especially with technology and a younger workforce.”

Let’s jump right to the topic, then.

WHAT IS COMMERCIAL REAL ESTATE?

There are multiple types of properties that would fall under this Commercial Real Estate Category. But what exactly is Commercial Real Estate? How can we define a Real Estate Property as a Commercial Property in Real Estate terms? Let us jump in to dive deeper in the topic.

Commercial real estate is a property type that allows you to do business, and which is not used for residential or habitual purposes. There are 5 divisions to Commercial Real Estate Property types.

  1. Institutional: This will include your office towers and corporate business complexes, or basically, buildings intended for business use.
  2. Retail: The definition of retail would be buildings used to promote commerce (or business) with consumers for goods and/or services. The retail would consist of your storefronts, the type of buildings you would find in regional shopping centres or strip malls.
  3. Industrial: Properties used for processing raw materials and manufacturing goods as well as their storage. Here we are looking at building such as warehouses, factories, manufacturing plants, etc. All of these would fall under the category of industrial real estate.
  4. Multifamily: Buildings used for dwelling that is comprised of more than four premises, so multifamily commercial would be anything that is bigger than fourplex. Any building that has more than four units would be considered multifamily and in this, we can get small buildings with six units or 10 units all the way up to hundreds of units. In this category we have things like school, personal care facilities, government buildings hospitals, all of these would fall under institutional real estate.

So basically, fourplexes and other complexes smaller than that would fall under residential real estate, and you can sell that for the residential real estate license.

A Note for new learners: It is important to note that to sell commercial real estate, you need a commercial real estate license. If you have a residential license, you cannot sell commercial real estate.

SAMPLE QUESTIONS

Now let us look at some of the exam questions you may see related to this topic.

Example 1:

A building used for processing raw materials and manufacturing goods as well as their storage describes which of the following types of buildings?

A. commercial
B. industrial
C. recreational
D. institutional

The correct answer here is B. Any building that is used for processing raw materials or manufacturing goods would fall under the industrial category.

Example 2:

A building with a specialized use aimed at serving the public or private clientele describes which of the following types of buildings?

A. multifamily
B. industrial
C. office
D. institutional

The correct answer here is D. Any specialized type of building would be called an institutional building. These would include your school’s personal care, facilities, hospitals, etc.

These are some sample questions with solutions and reasoning to get you understand the basic concept of Commercial Real Estate.

How does RECA define Real Property?

Learn Real Estate Concepts with Examples. Pass your Real Estate Exams in the first attempt with Alberta Real Estate School.

If you feel this interesting and can think of making a specialized career as a Commercial Real Estate Agent, get in touch with us at 587.936.7779.

You can listen to this blog in the Podcast Channel below. Stay in touch for more updates!

Good luck with your Commercial Real Estate Career!

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How to Change the Class of Real Estate License

Change Real Estate License Classes in Alberta with Alberta Real Estate School.

Well, we know the different classes of Real Estate Licensing in Alberta. But do we know about the procedure to change the real estate license from one class to another? Just like a Driver’s License, the upgrades and changes in your Real Estate Licensing also goes through a  specific procedure that follows various steps. 

 

Associate

An associate is an individual who holds the entry-level class of real estate license. This is the initial license a person earns when entering the real estate profession.

Associates must be registered with a brokerage to trade in real estate. The brokerage can have any number of associates registered with it.

Associate Broker

Now, who is an associate broker? An associate broker is an individual who holds the qualifications of a real estate broker, but they have chosen not to become a broker at this point. Instead, they are licensed as a real estate associate by RECA. This person is registered with a brokerage to trade in the real estate on their behalf.

A real estate associate broker has the same role responsibilities and prohibitions as that of an associate.

Broker

Let’s take a look at the role of a broker. The broker is the leader of the brokerage. They are responsible for making sure that all the activities of the brokerage comply with the Real Estate Act.

Because ultimately, anything that happens in the brokerage is the broker’s responsibility. A brokerage can only have one licensed broker. The broker may be the owner of the brokerage or they may be someone who is managing the brokerage on behalf of the owner. So, these were the different types of real estate licenses in Alberta.

Now, how do we go about changing the class of license that we have?

First, let’s take a look at the associate. In order to become an associate, a person has to successfully complete the Real Estate Associates Program. Which means they have to pass the Fundamentals of Real Estate Course as well as, one specialty area of practice.

So, they can take the Residential, Commercial, Rural or the Property Management Course. They have to score 70% or higher in both of these courses. Plus, they have to complete the REAP Program within 18 months from the date that they enroll in the Fundamentals of Real Estate Course.

So how does one go from being an associate to becoming an associate broker?

In order to become an associate broker, the associate must meet the following requirements. They have to successfully complete the REAP Program. Now, in this case, they have to complete all the specialty areas of the real estate practice.

That means they have to take residential, commercial, rural and property management courses. They also need to successfully complete the Real Estate Brokers Program and they have to score 70% or higher in all the exams.

In addition to that, this person needs to have two years of experience in Alberta working as a real estate professional, in the last five years.

Now, how does one go from being an associate broker to a broker?

Each brokerage can only have one broker. Like we discussed earlier, when an associate broker wants to become a broker, they have several options.

One is they can replace the broker at the brokerage where they are currently registered. So, let’s say the broker is retiring, then there’s an opening for the role of a broker. And the associate broker can go into that role because they already have all the qualifications.

Or the broker may be moving on to something else and there’s an opening at the current brokerage. Or they can transfer to an existing brokerage to become a broker there.

So, let’s say they hear of another brokerage, where the broker may be retiring or they may be moving on to something else, leaving an opening for the broker role and this broke person can then move to that brokerage and register with that brokerage as a broker.

Now, they can also open their own brokerage and become a broker there. This person has successfully completed all the qualifications of a broker but may choose to become a broker at a later date.

SAMPLE QUESTIONS

Now, let’s take a look at some of the exam questions that we may see around this topic.

1. How many associates and associate brokers can be registered with a brokerage?

A. one associate and many associate brokers
B. many associates and one associate broker and many brokers
C. many associates and associate brokers
D. many associates, associate brokers and brokers.

The correct answer is C. The question asks how many associates and associate brokers can be registered with the brokerage. And as we just learned, there can be many associates and many associate brokers that can be registered with a brokerage, but only one broker.

2. In order to become a broker, how many years of experience must you have as a licensed real estate professional in Alberta?

A. have two years of experience in Alberta as a licensed real estate professional

B. in the previous five years or have three years of experience in Alberta as a licensed real estate professional

C. in the previous five years or have three years of experience in Alberta as a licensed real estate professional

D. in the previous seven years or have two years of experience in Alberta as a licensed real estate professional, in the previous seven years.

The correct answer here is A. A person needs to have two years of experience in Alberta as a licensed real estate agent, in the last five years.

 

3. Paul Ellison is an ambitious real estate agent. In setting his career goals, he mentions that he wants to become a broker. What requirements must Paul meet in order to reach his career goals?

A. successfully complete the Real Estate Associates Program.

B. successfully complete Real Estate Property Management Program.

C. successfully complete the Real Estate Brokers Program.

D. have two years of experience in Alberta as a licensed real estate professional, in the previous five years.

E. have three years of experience in Alberta as a licensed real estate professional, in the previous five years.

The correct options are A, C, and D.

 

Read about the Different types of Classes for Real Estate Licenses in Canada to understand basic structure of Real Estate Classes.   

If you would like some additional help in preparing for your Alberta Real Estate Exams, we invite you to visit www.albertarealestateschool.com or you can give us a call at 587-936-7779.

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Classes of Real Estate Licenses in Alberta

A short video by Raman Gakhal of Alberta Real Estate School explaining the different classes of Real Estate Licensing in Alberta.

Real Estate Licensing is a mandatory requirement for Agents who want to make transactions with real estate property. As tedious as it is to understand the process of obtaining a Real Estate License, first you should know what the different Real Estate Licensing Classes are.

4 Classes of Real Estate Licensing in Alberta

Brokerage

A brokerage is a legal entity that is registered with RECA. So, this can be a sole proprietorship, partnership, or corporation.

For example, Peak Real Estate Brokerage Ltd, or Regency Commercial Brokerage. These are legal entities that are registered with RECA.

A brokerage is authorized to trade in real estate on its own behalf. A brokerage employs a licensed and registered real estate broker. A brokerage can have any number of associates and associate brokers registered with it. And each brokerage can have only one broker.

Broker

So, who is a broker? The broker is the leader of the brokerage. The broker is responsible for making sure that all the activities of the brokerage comply with The Real Estate Act.

Ultimately, anything that happens in brokerage is the responsibility of the broker. The broker may be the owner of the brokerage, or it may be someone who manages the brokerage on behalf of the owner. Each brokerage can have only one broker.

Following this, a question may arise to you – How does one become a broker?

Broker – Eligibility Criteria

  1. To become a broker, the person needs to successfully complete the REAP Program, which is the Real Estate Associates Program, including all specialty areas of Real Estate Practice.
  2. In addition, they also need to successfully complete the Real Estate Brokers Program REBP, The Minimum Passing Score is 70% or higher for REBP.
  3. As well, they need two years of experience in Alberta as a licensed real estate professional in the previous five years. Once a person has all of these qualifications, they are now ready to become a broker.

Associate Broker

An Associate Broker is an individual who holds the qualification of a real estate broker. So, they have met the same education and experience requirements as that of a broker.

However, they have chosen not to become a broker at this point. Instead, they are licensed as a Real Estate Associate Broker with RECA.

A real estate associate broker is employed by a licensed real estate brokerage in Alberta. And this person is registered with an approved to trade in real estate on behalf of this brokerage.

Although the associate broker holds all the qualifications of a real estate broker, they have the same role responsibilities and prohibitions as that of an associate. The brokerage can have any number of real estate associate brokers registered with it.

Associate

An associate is someone who holds the qualification of a Real estate Associate. That means they have successfully completed the REAP program.

This person is licensed as a real estate associate by RECA. They have to be employed by a licensed real estate brokerage in Alberta and they are registered and approved to trade in real estate on behalf of that brokerage.

This is the entry-level class of real estate license, which is the initial real estate license the person earns upon entering the profession. The brokerage can have any number of associates registered with it.

SAMPLE QUESTIONS

Let us look at some of the sample questions that we may see around this topic.

Example 1:

How many associates, associate brokers and brokers can be registered with a brokerage?

A. One associate, many associate brokers, and brokers
B. Many associates, one Associate Broker, and many brokers
C. Many associates, associate brokers, and one broker
D. Many associates, associated brokers, and brokers.

The correct answer is C. As we just learned in Alberta, a brokerage can have many associates and associate brokers but only one broker.

Example 2:

Which of the following individuals holds the qualification of a real estate broker, but is not authorized to operate a brokerage?

A. Agent
B. Broker
C. Associate
D. Associate Broker

The correct answer is D. An Associate Broker has all the qualifications of a real estate broker, but they are not authorized as a broker. So, they are not able to operate on run a brokerage.

Example 3:

Which of the following describes the class of license individuals hold who are new to the real estate profession in Alberta?

A. Agent
B. Broker
C. Associate
D. Associate Broker

The correct answer is C. The associate is the entry-level license that a person gets when they first get started in the real estate profession in Alberta.

These are some sample questions with solutions and reasoning to get you understand the basic concept of Real Estate License Classes.

Do you recognize yourself leaning more towards becoming a Broker than being an Associate Broker? See How to Change your Real Estate Licensing Classes in Alberta.

If you feel this interesting and can think of making a career in the Alberta Real Estate Industry, get in touch with us at 587.936.7779.

You can listen o this blog to our Podcast Channel below. Keep in touch!

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Career Options as a Broker

Raman Gakhal, CEO of Alberta Real Estate School explaining briefly the extensive career options you can have as a Real Estate Broker in the Alberta Real Estate Industry.

Real Estate Markets have been booming above every other market, in general, because of high valuations of the product it offers. There is always a high demand for its products which gives opportunities for sellers to create a bigger market and serve the never-ending thirst for real estate properties. (Real Properties may be defined differently than you usually hear. Have a look at our Term of the Day) The ever-increasing demand leads to a surge for career options as a broker (or any other member) in the real estate industry.

Just like any other market, property markets also have various elements and hierarchies involved to manage the business in the most efficient way possible. Different authorities perform different duties to serve their best to the real estate industry. Here are some of the best career options you can look for as a broker or any other member if you are involved in the real estate business.

WHO IS A REAL ESTATE BROKER?

To understand the topic of Brokerage, we first need to understand who a Real Estate Broker is and how is he different from regular Real Estate Agents.

  1. The broker is the leader of the brokerage firm.
  2. Real Estate Agents work under the management of the Broker.
  3. The broker is responsible for making sure that all the activities of the brokerage comply with the Real Estate Act.
  4. The broker could be the owner of the brokerage, or it could be somebody who is managing the brokerage on behalf of the owner.
  5. Each brokerage can only have 1 broker.

Qualifications to Become a Real Estate Broker

There are certain things that you need to keep in mind if want to become a Broker in the Alberta Real Estate Industry. You can be eligible to become a Real Estate Broker in Alberta if you qualify under the following categories.

  1. A person needs to successfully complete the REAP program (Real Estate Associates Program) and complete all the areas of real estate practice. This means that you will have to pass the Residential, Commercial, Rural, and Property management Courses by RECA with a minimum score of 70%.
  2. Apart from the REAP Program, the candidate should also complete the REBP Program (Real Estate Brokers Program) with a minimum score of 70%.
  3. The candidate should have 2 years of experience in Alberta as a licensed real estate professional within a period of 5 years.

Responsibilities of a Broker

A Broker has an authoritative position in the industry. A broker is entitled with duties and responsibilities that are important from a legal, official, financial, and managerial perspective. A broker can be accountable for the following roles and tasks.

  1. Supervision of associates and all the unlicensed staff that may be employed by the brokerage.
  2. Check and verify all the trades that go through that brokerage and make sure all the real estate agents within his brokerage firm are working within the guidelines outlined by the Real Estate Act.
  3. Responsible for maintaining the proper management of, and control of the documents, and making sure they stay on top of the trust accounts.
  4. Make sure that all the business of the brokerage is carried out competently and in accordance with the Real Estate Act.

To summarize, the broker is responsible for everything that goes on in the brokerage.

Career Options for a Broker

Now let’s take a look at what are the career options if a person wants to become a broker –

1. Become a Broker at a Current Brokerage Firm

So, if the broker of the current brokerage is retiring or leaving a brokerage firm with any other reason, there may be an opportunity to become a broker with that brokerage firm. There can only be one broker per brokerage, so there must be an opportunity, or that role available.

2. Start your own Brokerage Firm

If you are firm and confident enough to start your own brokerage firm, go ahead. Make sure you get Real Estate Agents to work under your brokerage firm.

3. Become an Associate Broker with RECA

Becoming an associate broker with RECA is the best option to serve the Real Estate Industry without having the responsibilities to manage Real Estate Agents under you. An associate broker has all the qualifications that a broker would have.

SAMPLE QUESTIONS

Now let us take a look at some of the exam questions that we may see on this topic.

Example 1:

Which of the following requirements must a real estate associate fulfil in order to be licensed as a real estate broker?

I. Complete the Real Estate Brokers Program.
II. Be authorized in all specialty areas of real estate practice.
III. Be able to be employed as a broker of a real estate brokerage.
IV. Have at least two years of experience as an associate within the previous five years.

And the options are:

A. requirements one, two, and three.
B. requirements two, three and four.
C. requirements one, three and four.
D. all the above.

The correct answer is D.

Example 2:

Which of the following individuals is authorized by RECA to operate and manage a real estate brokerage?

And the options are:

A. agent.
B. broker.
C. associate.
D. associate broker.

The correct answer is B. A broker is the only person who is authorized by RECA to run a brokerage.

Example 3:

Pauline Yan has recently passed her REBP courses and is now ready to start her career as a broker. Which of the following is not a valid career option for her?

And the options are:

A. becoming the second broker at her current brokerage.
B. becoming the broker at another brokerage.
C. becoming the broker at a new brokerage.
D. becoming an associate broker.

The correct answer is A. A brokerage can only have one broker. So she cannot become a second broker at her current brokerage.

These are some sample questions with solutions and reasoning to get you understand the basic concept of Brokerage.

Did you know??

Real Property and Real Estate Property have different definitions in the book of Law and Real Estate!

Strengthen your Real Estate Terminology with our Question of the Day & Term of the Day Videos, only at Alberta Real Estate School.

If you feel this meaningful and can think of making a career in the Alberta real estate industry, get in touch with us at 587-936-7779. 

Good luck with your Real Estate Studies!

You can listen to this blog on our Podcast Channel below. Keep in touch for more updates.

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