That branch of the active real estate business, known as agency, is the dealing in or with real estate for or on behalf of others. More persons by far are engaged in this class of the business than in any other. Since the agent is not dealing with his own mtoney, his compensation is a share, usually a percentage, of the amount involved. Agency has two general subdivisions (a) brokerage and (b) management.

In brokerage the agent, by reason of his acquaintance and knowledge, is engaged in the task of bringing together persons desiring to make transactions in real estate, whether to buy, sell, exchange, lease, loan, or borrow on mortgage. In such transactions the broker's compensation is known as "commission" the amount of which is usually based on the value of the real estate or interest therein and is fixed by custom or agreement.

Management is that phase of the real estate business in which the agent takes charge and control of real estate for the owner. He collects rents, leases space, arranges for and superintends repairs and attends to the general upkeep of the property. To be successful his aim is to secure rentals as high as possible while keeping carrying charges as low as proper care of the property will permit. His compensation is usually a percentage of the amount of rents collected. In most real estate offices the management business is carried on by a trained force of employees, the profit upon such business being sufficient often to pay the carrying charges of the office. This relieves the agent of the details of management, except for general supervision, and frees his time for the more interesting and lucrative work of brokerage.

Any business necessarily implies commercial transactions in a commodity. One engaging in business, whatever it is, must know his commodity or stock in trade, know how to transfer it, and how to so manage it as to acquire profit. In our study of real estate as a business we shall consider it under three general heads:

1. Subject matter. - Land, interests in it, liens, taxes and assessments.

2. Transfers. - Contract, examination of title, closing of title and the usual instruments used in connection therewith.

3. Management. - Relation of landlord and tenant, brokerage and valuations.

The laws governing real estate transactions, while there are of necessity many, are neither mysterious nor difficult to understand, and any man should be able, with intelligent effort, to familiarize himself with them so as to aid him materially in whatever business he may be engaged, whether he confines himself to the real estate business or not.