Suppose you’re considering buying or selling real estate or hiring a real estate agent to do so on your behalf. In that case, it’s essential to understand the role a real estate background check can take in what may be the most significant financial transaction of your life. A real estate license background check will provide information about an individual’s history, professional qualifications, and legal standing. Today, we’ll explore some of the details of running this kind of background check and what to look for when conducting a professional and criminal history check in the real estate industry.
What Is A Real Estate Background Check?
A real estate background check will require a similar set of data about an individual that a standard background check would need, such as looking into whether the person you’re considering doing business with has a criminal history or any convictions, as well as elements like reference checks to ensure their professional background is reputable and accurately described. However, a real estate license background check will be more specific, as it will verify whether your potential agent or broker has the licensing, financial stability, and educational background you expect. You’ll be able to ensure they don’t have any troubling financial history like a series of bankruptcies.
How Does Real Estate Licensing Work?
Real estate licensing practices vary from location to location, but most countries and states have some elements in common that all aspiring real estate professionals must comply with. They’ll need to complete some standard pre-licensing courses that go over core elements of the profession, like legal and ethical standards. These courses typically end with exams to ensure candidates are adequately equipped for the job.
After passing an exam, they will submit background check information like proof of education and possibly fingerprints to whatever central real estate licensing authority has jurisdiction in the area. After acquiring a license, qualified agents are typically required to periodically continue their education in the field to keep up with any advancements. They will typically report to a real estate commission that defines the requirements for licensing and doles out punishment for deceptive practices.
How Far Back Do Real Estate Background Checks Go?
A background check may vary in how far back it searches through records about any given individual, and real estate background checks are no different. Typically, they’ll find criminal records for seven to ten years, but no further. Financial status and credit checks will usually observe a similar period, with most debts and bankruptcies falling off a credit check within seven years.
Real estate licensing is a different matter, with any ethical breaches or complaints likely remaining on record for a much more extended period than private financial matters or even criminal records. You’ll be able to tell if they have the license, as well as any issues that may have occurred during their real estate career.
Real Estate Background Check Laws To Know
It’s good to be aware that laws around background checks can vary widely in different situations and locations. Any background check must follow regulations established by the Fair Credit Reporting Act, FCRA, which outlines the requirements for obtaining and using consumer reports. Anyone with their background scanned for problems must consent to the check, which remains true when performing a history check in the real estate industry.
A real estate background check must be completely accurate, and any potential inaccuracies must be noted before conducting the individual’s background history check. Additionally, the candidate should be allowed to dispute this information before it impacts your decision-making process. Lastly, these checks need to be made with absolute confidentiality and robust security systems to ensure that sensitive data isn’t leaked or stolen. For these reasons, when conducting a real estate background check, you should always consult a legal professional to ensure total compliance.
Conclusion
In the real estate industry, background checks are one of the crucial tools that provide transparency into the integrity and qualifications of real estate professionals. Understanding what these checks entail, their limitations, and the functions of real estate licensing and laws is essential for responsible consumers and professionals looking to break into the industry. By adhering to ethical and legal standards in conducting and interpreting these checks, the real estate industry can maintain its reputation of integrity and transparency, benefitting all parties involved in any transaction.
