What is a Real Estate Broker Bond?
A real estate broker bond is a surety bond which guarantees that any properties or funds turned over to a bonded agent or broker during a real estate transaction will be properly handled and accounted for.
The bond also guarantees that real estate brokers will perform all of their duties in compliance with regulations for their license in their state. This is why these bonds are usually required for real estate broker license applicants, as part of their professional licensing process.
Real estate broker surety bonds protect the state that issues the real estate broker’s license, as well as the individuals who make use of the broker’s services. If, for example, a broker mishandles funds entrusted to him, or engages in other forms of fraud, a claim can be filed by the bond’s obligees against the bond.
The real estate broker bond is essentially an agreement, between three parties:
- Principal - the real estate broker
- Obligee(s) - the state requiring the bond
- Surety bond company - the underwriter of the bond
If a claim is filed against the bond, the surety is there to step in, assess the situation, and– if needed– compensate the obligee(s) for all losses which they may have suffered due to the broker’s actions. The broker must then reimburse the surety for the compensation it has extended to obligees.
Questions about Real Estate Agentbroker Bonds in Illinois
Who needs to obtain a real estate broker bond?
Many states require real estate agents, real estate brokers, and real estate appraisers to obtain these bonds. In some states, such as Oregon, a similar bond (a manufactured structures dealer bond) may be required of manufactured structures dealers, or real estate brokers who sell manufactured homes.
Usually the state’s Department of Consumer and Business Services or Real Estate Commission determine the type and amount of the bond you need to obtain, so make sure to check with them for all the facts.
Are there different types of real estate broker bonds?
Real estate broker surety bonds differ mostly in their amount from state to state. Amounts for these bonds are usually fixed, though depending on local legislation they may also vary on a case-by-case basis.
There may be a separate bond for manufactured structures dealers, as is the case in Oregon, but most states that require real estate brokers to get bonded have one type of bond.
How much does a real estate broker bond cost?
The cost of this bond is a fraction of the total bond amount. This is the amount of coverage that the state deems is necessary, to offer adequate protection to obligees.
Sureties determine the cost of the bond by reviewing an applicant’s personal credit score as well as other indicators of financial stability, such as personal and business financial statements. If an applicant has a high credit score, they can expect to be offered the standard market rate, between 1%-4% of the total bond amount.
If you would like to request a free bond quote, simply follow the application link and submit a surety bond application form. Approvals and assessments of applications for real estate broker bonds typically take very little time, so you can expect to hear from us very soon.
Can I get a real estate broker bond with bad credit?
Even if you have a low credit score, it is still possible for you to get a real estate broker bond.
With our Bad Credit Surety Bonds program, applicants who otherwise experience difficulties in obtaining a bond, can do so without excessive difficulties, and by paying only a slightly higher rate. Under this program, for applicants with less than perfect credit score, the bond premium can be between 5%-10%.
This is made possible by the surety bond companies we work with that back our bonds. All of them are A-rated and T-listed, which means they are highly secure and reliable. It also means that they are experts in what they do and are among the top sureties in the U.S.
Lance Surety Bonds is committed to securing the lowest rates by the best sureties for all our applicants. By obtaining your bond through us, you are guaranteed quality at a competitive price.
How do I get my real estate broker bond?
Getting approved for your real estate broker surety bond is quick and easy. Apply online, submit your surety bond application form, and get your approval in no time.
If you have any specific questions about your bond or require assistance, call our surety bond experts at (877)-514-5146. They can respond to your questions, and provide you with any help you may need during the application process. Alternatively, you can contact us via email.
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