It is far too easy to get a real estate license. There, I’ve said it (again). It’s probably going to irritate a lot of people but that’s just too bad. It’s ridculously easy to get a real estate sales license. All you need to do (in AZ) is sit through 90 hours of classroom “education”, be 18 years old, have a relatively clean criminal record and pass the licensing exam. That’s it. Need any high school? Nope. Any apprenticeship? Zip. Any formal training? Zero.
90 hours in the classroom, which you could complete in as little as 9 days if you were some sort of masochist. The school is horrifically boring and the chairs are painfully hard (the better to keep you awake). Put your butt in the seat for 90 hours, pass an exam, supply your fingerprints and drivers license. Fill out a form, write a few checks and POOF, you can call yourself a real estate professional!
Training? Nah… You can legally list or sell a home the day you get your license. “What about those 90 classroom hours?” you may be asking. “Don’t you get training there?”
The answer is a resounding NO. What real estate school teaches you is how to pass the state licensing exam. They don’t teach you how to sell real estate, how to deal with clients, other agents, title companies, loan officers, inspectors, whiny kids, buyers, sellers, or brokers. Oh you may occasionally get a war story about real estate from the instructor–I learned more REAL real estate talking to my instructors during break that I did in the classroom. The schools churn out future professionals by the score every single day. And they do a damn fine job preparing you for the state exam. They do nothing to prepare you for selling real estate.
Hopefully the new agent aligns himself with the kind of broker that will take them under their wing and truly help them. Sounds simple, but finding a broker that does that these days isn’t easy. Too many brokerages just bring in agents by the truckload. Some have HUNDREDS of agents working for them. It’s just a numbers game to them. The more agents they have, the more desk fees they collect. If they run a commission split office, they figure if they hire a few hundred agents then dumb luck means some of them will turn out to be successful. Those that quit (and 80% do in the first year) are simply replaced by new sheep.
Let’s step back a second and compare the requirements for getting a real estate sales license to a few other licenses/certifications:
- COSMOTOLOGIST (hair stylist): 1600 hours education, 2 years High School education, at least 23 years of age
- AESTHETICIAN (skin care specialist): 600 hours education, 2 years High School education, at least 23 years of age
- NAIL TECHNOLOGIST: 600 hours education, 2 years High School education, at least 23 years of age
- MASSAGE THERAPIST: 500 hours education, High School Graduate/GED required
- RESIDENTIAL REAL ESTATE APPRAISER: 90 hours education, 2000 hours apprenticeship completed within 18 months
- HOME INSPECTOR: 80 hours education, complete 30 inspections as apprentice
- MEDICAL TRANSCRIPTIONIST: 240 hours training typical. Associates degree preferred. No required certification
- REAL ESTATE SALES LICENSE: 90 hours education, 18 years of age.
It takes 17.7 times as many classroom hours to get a barber’s license as it does a real estate sales license. Want to get into good colleges and universities? Expect to spend almost 7 times longer in a classroom and multiple sessions with TWINS Education’s IGCSE online private tutors. Oh, and be sure you have two years of high school. You don’t need ANY high school education to sell real estate.
The public perception of real estate agents is not good — just Google “Realtors Suck” and read some of the 3,660 results if you don’t believe me. It’s not pretty.
The low barrier to entry is a big part of the problem. I assure you there is someone out there at the very moment you are reading this that decided 3 or 4 weeks ago to become a “real estate professional”. This person is no professional. The barely qualify as a trainee. Yet they are going to go out there and mangle some transaction, cause undue stress and pain for the hapless buyer or seller that’s using them (more than likely that will be a relative, friend, and/or their best friend’s sister’s husband’s cousin.)
Hapless buyer/seller has bad experience. So maybe they blog about it. Maybe they express their opinion on MySpace. heck, maybe they even set up an entire website that explains why their Realtor sucks so bad. And all this “publicity” spins on as the image of real estate agents slips lower and lower until we’re rubbing noses with attorneys and car salesmen.
What to do? Simple answer, complex solution. The answer is raise the bar to entry. There should be more classroom hours. REAL classroom hours, not just “instructors” saying, “Ahem, you may want to remember this in a couple of weeks…” If you can train someone to fly a jet fighter, or cut a tumor out of someone’s brain, you can train someone to sell real estate. Don’t train them just to pass a test. How about having at least MINIMAL previous education requirements? It’s hard to get ANY job without a high school diploma. Make that a minimum (it is in some states). Why not a true apprenticeship program? Make it a requirement that new licensees work a minimum number of hours or transactions with an experienced agent or broker. Yes, the “we’ve always done it this way” attitude of compensation may have to be revised. Or would it? Not many new agents start out of the box with too many sales. Most go months before their first transaction. If they WORKED in those months, REALLY worked, then they could probably complete an apprenticeship in that time period.
The real problem might be making experienced agents mentor/train new agents. So make it a requirement for license renewal hours. We already have to take a certain number of hours in specific topics in order to renew a license every two years. Just add mentoring junior agents to the required continuing education hours. Better yet, make it a requirement for brokers to mentor agents in order to renew their license. Then maybe brokers would be inclined to take on bright, hard working agents.
Now there’s a concept.
Other blogs on low barriers to entry in real estate: Matrix, Portland Real Estate, Paul Caloca, Kristal Kraft and DailyPundit. Jim Duncan has an entire blog category devoted to public perception.
The Phoenix Real Estate Guy was started by Jay Thompson, and I have a little blogging problem... he liked to say...
Jay, you know that I will agree with you on this issue. Your post is very fair and we all know that there is plenty of talk about these kinds of issues out there.
However, all these great ideas…. I mean they are great but who gets us there?? Who are the leaders that will affect change??
Look I have my own battles with an apathetic Membership, but there are things worth fighting for… if you have the right leaders.
Now that said, I don't have a beef with anyone in AAR leadership currently but I doubt this is their fight in the near future. So again it comes down to rallying the troops from the outside.
Who stands up to the brokers on this?? Who stands up to the Department?? Who stands up to the instructors??
Todd – Thanks for the great comment. And you are 100% correct. No particular beef with AAR here either, but I just can't see the "establishment" doing much to affect change. And if they did, I assume that the 2.3 bazillion agents already licensed would be "grandfathered" in under current rules. Greg Swann alluded to some potential changes happening, but we all know how slowly the wheels turn.
So we might see a reduction in people flocking into the business, but not much change WITHIN the business.
And it's not that I want to see fewer agents. I will eliminate my competition with superior service, I don't need license restrictions to reduce my competition. I'd like to see some change to the entry requirements because I think it would give consumers a better pool of agents to chose from, as well as increase the perception and hence the value of real estate agents in the public's eye. Then it's my job to set myself above that superior pool of agents. I'm all for competion as it makes us all stronger and better agents in the long run.
I have done my best to change the perception of agents in general with clients and prospects I work directly with. But it's going to take large scale changes, IMHO, to truly start to turn both the quality and perception of the agent pool in the minds of Joe Q. Public.
Jay – wow, you're right on about ease of entry. It sort of reminds me of something else. You need a license to drive a car, to vote and to get married. But you don't even need a class to have a baby. Some people do very stupid things and bring babies into the world who may never have a good life.
I took my 90 hours of training and got my license, and started a business.
I did not have a clue how to write an offer. I kept thinking why would anyone
want me to list their home when there are so many, let me repeat that so
many real estate agents. Well they did list their homes with me. By the time I
had 50 or so purchases under my belt and 20 or 30 listings I felt like I knew what
I was doing. It really takes experience, it isn't rocket science. I think their
should be some kind of an apprentice program or something.
Jay, as you said " …because I think it would give consumers a better pool of agents to chose from, as well as increase the perception and hence the value of real estate agents in the public’s eye"
Boy something needs to be done, big time, and not thru cute advertising campaigns.
I know I've beat this drum before, but once again it seems appropriate. I think that the large numbers of poorly trained, unprepared agents has left the door wide open for the arrival of the new low/no service alternatives.
It took the Big 3 in Detroit 25 years and now a major crisis to get the message.
This won't take 25 years, it'll happen at internet speed.
Gov Schwarzenegger has just raised the bar.
raising the bar http://thetucsonfoothills.typepad.com/thetucsonfo…
John – Thanks for that nod and link. The other day when Arnie and I were playing 18 we discussed this. I didn't think he'd move this quickly! 🙂
CA has some different licensing regs than AZ don't they?! I *think* CA is one of the states where you can get a brokers license with no experience as well. But hey, it's a start, and a step in the right direction.
Oh, I could probably do a "blog back" on this one because I have lots to say. But I will spare your gentle readers and keep it brief.
I, too, am appalled that a hairdresser has had more classroom instruction than a Realtor. But I am all for the American Dream, and I actually don't mind the low barriers to entry as much as I mind the low barriers to staying!
I take umbrage with the fact that in my state, in order to remain licensed, only 6 hours of continuing education are required per yer. All one has to do is SHOW UP. No test, nothing. Just appear. Do whatever you want while you sit locked in the room. The president of our state association had his tablet with an aircard in front of him last time I took con ed. Do you think he was listening, or was he busy doing something else. My guess is on something else.
I've had as many messy deals with "experienced" Realtors who sell one home a year as I've had with newbies. As a matter of fact, I just had a horrid experience with an agent who told me "I've never had anything like this happen to me in my 5 years of selling homes." SHE had made a huge error over something a newbie is unlikely to forget if they have just passed the licensing exam in Michigan. Her error delayed our closing by 4 days, caused many frazzled nerves, and caused my client and I to walk out of a closing without closing.
Hmmmm. Maybe I should have done my own blog…
I think standards need to be increased across the board. Newbies are a small part of the problem.
Well said Maureen!
In AZ, we have to have 24 hours of continuing education every two years in order to renew our license. Many people wait until the week before their license expires and sign up for a "renewal marathon" where they sit in class for 3 days. And much like yours, the only test is whether you can stay awake. (and I've seen people fail that test and still walk away with credit.)
I like to think eventually the cream will rise to the top and those agents, who quite frankly have no clue what they are doing, will quit the business. Most do, but many do not. Perhaps if we raise the entry bar, then eventually the better incoming quality will drive out the bad and result in a better collective quality.
I don't know the solution, but it is past time we do SOMETHING. And you're right, it need to be across the board. Raising the entry bar is only the beginning…
Let's get the Captain Obvious stuff out of the way first. Yeah, raising the bar would be beneficial to say the least. That said, ask yourself how many high school freshmen do you personaly know who could do 90% of what the average agent is called on to do? How many of them could learn it easily in 90 days, and be good at it?
There are no physical skills to master, no health issues from our mistakes, (more or less) and with all the check lists available these days, the amount of paperwork (a tree dies for every escrow opened) is the only reason it would take that freshman 90 days to learn it. Repitition would take care of any future improvement.
What would raising the bar actually accomplish? Most mentors, and I am currently one, must teach how to use various contracts and the attending myriad forms generated by them. We teach when and why they're needed and how they help.
But in the end it boils down to showing new agents how to make money. Period. We can't teach integrity, work ethic, or a basic sense of right and wrong. We have escrows, title companies, lenders, TC's, inspectors, and many others who do all the real nitty gritty work for us. We teach how to make more money.
The basic problem you guys have with the status quo is the same one I have – agents are not nearly as accountable as they should be. And no amount of education or other 'raise the bar' requirements will change that. You can't legislate integrity or professionalism. And that's what really makes us all crazy, isn't it?
I've solved this problem at my firm dead in its tracks. You either have to share my DNA or not flinch when I call you Honey. 🙂
Jeff wrote: "What would raising the bar actually accomplish? Most mentors, and I am currently one, must teach how to use various contracts and the attending myriad forms generated by them. We teach when and why they’re needed and how they help."
Jeff – thanks for stopping by and commenting! *Kudos* to your for mentoring agents. The problem (at least around here) is that *very* few new agents receive any real training or mentoring. There are a bazillion clueless real estate agents wandering around, screwing up transactions left and right. I think if we had higher entry requirement, including true mentoring, apprenticeships, whatever you want to call it, BEFORE agents are released into the real world, then it would help tremendously.
You're right, you can't teach integrity and work ethic. But if you made it so people would at least need a clue before they became licensed agents, then maybe those who are low in the work ethic and integrity department would fade away BEFORE they got a license.
Couldn't agree more. Possibly the test would have a requirement to have a mentor, approved by the local Board, already designated.
Todd references my post on PortlandRealEstateBlog about the same problem so I am definitely in this camp.
I think Teresa’s comment is indicative of what the industry has done to itself: it implies that took roughly 70 transactions to feel competent. That means 70 clients got less than competent service (the outcome of each transaction is irrelevant).
Thankfully, as the real estate market changes and the easy buck gets harder to earn, the herd will thin and those that remain will hopefully be able to bring the perception of our industry up.
I had to laugh at this post. I completed my required hours in three weeks, and I did it by tape, I didn't hven have an instructor! You are so right they teach you to pass the test, not sell real estate.
There's so much I wish I had known in the beginning. If I knew then what I learned since leaving the sales end to become a virtual assistant, I might have been a top producer, lol. In addition to what to do in situations that you might encounter during a deal I would have liked business training, how to market, how to budget.
Crystal – a LICENSE by tape? YIKES! And I thought is was sad that I could do renewal hours on-line…
I had a rather interesting discussion with an AAR higher up at the REALTOR Caucus on thursday in Scottsdale (where were you??).
Anyway, to fight this cause the pressure will have to be placed on the brokers. The department simply could care less… they are the government anyway. Their only criteria on the instuctors of the licensee's is the percentage of newbies that can pass the national and state test. End of story.
Wouldn't matter how many hours of class you'd like to add, the instructors would still only be teaching the students how to pass the test.
So if it is on the brokers like I truly think it is, now what??
How do you get the brokers to raise the bar??
I think I may the aspirations of being AAR president someday (15 years or so from now, when I'm wealthy enough to afford the time). I think I'm going to want to ruffle some feathers… who is going to help me??
Here is a idea, rather than a apprenticship, which I have no desire to be training new agents, why force re-licensure classes each year. Well not for all Realtors, just for those who do less than say 2 transactions in the previous year. Make them spend the $550 to take the class, Sit the 90 hours, or 150 hours depending on the state. Then make them take the exams again. If nothing else it will force all agents to work harder as well.
After a few years I am sure that many of the agents who currently do 1 deal or less year after year, and there are many many like that, will drop out and focus on their real life.
And yes a good example of a company who does not have customer service as their main goal is laided out in detail at http://www.whyweichertsucks.com
Just my 2 cents.
Jay I don't even know what to say. You and I are completely on the same wavelength. And to think this post is years old. I've been saying for a long time now that things need to tighten up in a serious way. Honestly, I hate to say it but have been repeatedly *embarrassed* by the way NAR conducts business over the past few years. Straight up…embarrassed. Almost to the point where I, as TheRealEstateBloggers puts it…don't like referring to my friends as "Realtors". I deliberately call my friends "real estate professionals", so as not to associate them with Realtors. It's almost as if NAR doesn't understand the value of the very industry they advocate.