Licensed Real Estate Broker vs. Unlicensed Real Estate “Agent” in the Philippines

What is a broker and what is an “agent”?

All brokers are considered as agents, but not all agents are brokers.

A “broker” is someone who holds a broker's license. And an “agent”, on the other hand, can be a licensed broker or a licensed salesperson who works under a broker's authority.

Some reasons why you should only deal with licensed real estate professionals:

1. Dealing with a licensed real estate professional, actually gives you the security because you can file for cancellation of his/her license if he/she had done any malpractice. However, if you’re dealing with unlicensed “agents”, in cases of malpractice, you cannot file for cancellation of his/her license because they don’t have a license in the first place.
2. A licensed real estate professional have an office and/or a professional organization where he/she belongs so you know where to find them. Also, their license card is a definite proof that they are eligible to handle real estate transactions with regards to the law and taxation. On the other hand, when an unlicensed real estate “agent” ran away with your money, you’ll never know where to find him/her because he/she doesn’t have an office or any professional organization. And since an “agent” doesn’t have a license, he/she can’t show you any professional credentials that can prove that he/she is knowledgeable enough for the said real estate transaction. Also, because he/she doesn’t have a license, you don’t have information about him/her, so it’ll be hard to go after them if in case a malpractice has been done.
3. Dealing with a licensed real estate service practitioner gives you the security because they have this code of ethics, legal standards, and professional standards in dealing with their clients. In other words, they cannot be involve into any dubious practices such as, giving misleading information, loan-shark-deals, providing fake property titles, bogus real estate appraisals, phony property mortgage processing, forgery, fake ID’s, fake registered owner, fake registered spouse, fake Special Power of Attorney, tampered Extra-judicial Settlement of Property, inaccurate calculation of taxes, dubious squatters’ settlement, and many more. Also because they are licensed, they are confident in dealing with lawyers, assessors or any professionals that are needed in a real estate transaction.
4. And lastly, it is illegal to deal with unlicensed real estate agents in the Philippines simply because dealings with them are punishable by law according to Republic Act 9646. The said law is meant to prevent the practice of “colorum” agents and also property sellers who are still patronizing to the so-called freelance illegal property agents to avoid paying taxes and proper commission rates.