The Real Estate Industry Shouldn’t Make It Harder to Participate

March 21, 2007 |

There is a constant background conversation in the real estate industry that has to do with increasing the standards for real estate licensing as a means of improving the quality of licensees and public perception of the industry as a whole.  Agents all over the country engage in this conversation every year, and talk has become louder and louder as the overall number of real estate licensees has increased.

The argument that people make for increasing licensing standards usually goes something like this, “it is too easy to get a real estate license.  If we made it harder, then we could increase the overall quality of real estate licensees and real estate agents would have a better reputation as a whole.”  People then go on to suggest increased standards such as requiring a college degree, increasing the amount of pre-licensing education, making the required tests more difficult, etc.  To me, all of these suggestions and the argument put forth to support them are complete bunk.  Here’s why. . .

More extensive barriers to entry do not automatically create better agents.  As just about anyone with a real estate license will tell you, the education that you get prior to being licensed does very little to ensure your success in business, other than informing you of the legal requirements and obligations that, when followed, will allow you to keep your license.  The things that make for good agents are not covered in any licensing class.  They are learned after the agent begins working.  They are learned through broker training classes, or through mentoring, or through the time-tested technique of trail and error.  The idea that making it harder to earn a license will increase the quality of the agents is preposterous because it ignores this fact.

There is another factor at play here as well, the human factor.  For the most part, people are who they are.  Their individual practice of their profession will reflect this. Bad people are going to do bad things whether they are practicing real estate, medicine, law, or automobile repair.  Making the required eduction longer, or requiring an advanced degree isn’t going to turn these people good.  In fact, many of the people that I have come in contact with whom I would describe as “bad apples” possess college degrees.

If people truly want to make the profession better, and increase its overall public perception, the most impact can be made once people earn a license.  It is at this point that an agent is most vulnerable to influence from external sources.  A new licensee is (hopefully) going to absorb just about everything that comes his way.  He will learn mainly from the examples set by the agents around him.  If those are good, ethical agents, then the new agent’s opportunity for success is greatly increased.

Brokers play perhaps the most important role in the success and failure of new agents.  Brokers are charged with protecting and enhancing the reputation of not only themselves and their companies, but also the reputation of the industry as a whole.  This is done through their actions, and by leading through positive examples of what should be done.  Sure, you could increase the licensing standards, but if those already licensed are practicing unethically or illegally, all is for naught.

If the goal of those who advocate the increasing of licensing standards is truly the reputation of the profession, then they should turn to themselves and seek out the new agents around them and act as a mentor or at least a positive example of the real estate professional.  That will have a far greater impact on the profession than any increase in education requirements.

[tags] real estate, realtor, charlottesville, virginia, real estate license [/tags]

Posted by Daniel | Filed Under Industry Issues 

Comments

4 Responses to “The Real Estate Industry Shouldn’t Make It Harder to Participate”

  1. Jeremy Hart on March 22nd, 2007 2:02 am

    Nice job Daniel - this is a major soapbox for me so I read it with great interest. The children’s book “All I Really Need To Know I Learned in Kindergarten”, by Robert Fulghum, really applies to all aspects of life, not just real estate - it’s a good reminder that we should treat each other as we would want to be treated … and that includes how we treat our clients! Nice post.

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  2. Should Commercial Agents Have a Separate License? | The Real Estate Zebra on March 27th, 2007 1:05 am

    [...] RSS ← The Real Estate Industry Shouldn’t Make It Harder to Participate [...]

  3. chip on March 27th, 2007 8:11 pm

    You make some good points, but here’s something to consider. Nationwide, the average home price is over $250k. High cost states such as California, New York, and Hawaii the average home price is above half a million dollars.

    Generally the trasnfer of real estate, especially in these high cost states, come with pages upon pages of inspections, disclosures and the like. Hundreds of in depth contractual pages that need to be digested.

    Still it used to take only 1 class that could be done by correspondence to get a license in California. A provisional license that last 18 months. Just enough time to get in, sell a few houses and get out before the market changed.

    With such a low barrier to entry, you ended up with plenty of people who had no knowledge of the real estate market covering these transactions. Transactions that by and large are most people’s largest purchase. Over half a million dollars on average. And no substantive education on the process.

    Even beauticians are required to have 3000 hours of apprenticeship.

    While I agree that the perception and effort needs to be made as stewards of the industry, isn’t it also good practice to make sure those coming into the industry are educated?

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  4. Angela Ward on March 28th, 2007 11:14 am

    Aloha,

    I just got my broker’s license in Maui and was intimated what do with it. It seemed pretty stupid to keep working for someone else, but the thought of going out on my own was really scary! But I’ve made the decision to open my own company and spending lots of $ on start up costs, especially office space.

    When I was a salesperson, I never got any clients from floor time, so I figure why waste $ on prime office location.

    If anyone would like to share some insight on opening their own real estate brokerage and not being w/ a franchise, I’d love to hear from you. All the best, Angela

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