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Here is my review as a Realtor of the ideas expressed in the Inman article “11 proposals for weeding out shoddy real estate agents.”
Increase Realtor association dues (Grade: B)
If there are to be fewer real estate licensees paying dues, those who stay in the business will pay higher fees and dues — which is necessary and fair.
But higher fees and dues will not self-correct for the licensure or retention of “shoddy” agents.
Raise Realtor education requirements (Grade: B+)
This idea is great, but if and only if real estate license CE is divided into two categories: “public benefit” and “licensee benefit.”
CE such as NAR’s Code of Ethics and Fair Housing Practices benefit the public. Learning how to design a better lead-generating website benefits licensees.
Most professional CE is intended to promote public benefit though on-going education rather than enhance the profits of licensees. Regardless, there is room for both types of CE in real estate.
Increase real estate licensing fees (Grade: D)
Most states prohibit their licensure enforcement agencies from charging fees that would result in a profit — whether accounting or actual. So this is a dead on arrival.
Require real estate agents to demonstrate productivity (Grade: F)
Should the government also require certain minimal levels of productivity (output) for physicians, attorneys, engineers, widget-makers and the rest of us? (I hope not.)
If so, let’s do a trial run with requiring productivity for government employees.
Require real estate agents to graduate college (Grade: C-)
In 32 years of real estate brokerage practice, I’ve seen no meaningful correlation between formal education and proficiency or professionalism as a Realtor.
Nonetheless, increasing education for licensure is worthy of further discussion.
Make it harder to qualify for a real estate license (Grade: A+)
In my state, the requirement to hold a real estate license is a high school education, two one-week classes approved by the state (which has little relation to the qualification to sell real estate) and a passing grade on the real estate test.
That’s a low bar to entry — far too low — and does not serve anyone well.
Require agents to apprentice under a broker (Grade: A)
Appropriate under-study training is an excellent method for licensee development.
By comparison, many law firms require new attorneys to work with seasoned attorneys for extended times to learn skills to represent their future clients best.
Most real estate sales licensees are recruited and told to “get out there and look for business.” If they find business, they also find they are not trained how to handle it.
Beef up Realtor ethics complaint process (Grade B+)
Most buyers and sellers know that there are entities that regulate license law matters and accept complaints concerning license law violations.
However, few know the difference between a real estate law violation and an NAR Code of Ethics violation, much less about where to file either.
Many buyers and sellers think that a local MLS handles consumer complaints, which is incorrect.
Make it easy to find if a Realtor has committed infractions (Grade: B)
Do buyers or sellers of real estate perform any meaningful due diligence before selecting a Realtor? Not usually.
Should complaints be publicly visible or only license law violations that have passed the test of due process?
Educate consumers how to choose a real estate agent (Grade: D+)
Buyers and sellers are not likely to change how or when they select a real estate licensee to assist them with buying or selling a property.
NAR has spent huge money on national ad campaigns over the years without much change in how or when consumers decide to select an agent to assist them.
Real estate portals encourage online shopping for homes and values. Once a home is found an agent is contacted to see the home. This puts the “cart before the horse.”
If we ensure quality over quantity with better real estate licensing and retention, educating consumers about how to select a competent real estate is less important.
The real problem and another proposal
The core reason that there are “shoddy” agents is simple.
It is because state laws allow and encourage it.
Most states also have a low bar of entry to achieve and hold a real estate sales license, as compared to other service professions.
Why? Again, because state laws allow it.
If licensees did not tolerate low legal standards for licensure and practice, there would be a higher bar of entry, a standard of practice and better public satisfaction.
State legislatures most often educated by paid lobbyists — aka “guns for hire” — who push select agendas that are often slanted to special interests and not to our industry’s best interest.
Many states did not develop buyer agency laws (buyer representation) until the late ’80s and early ’90s. They were late to the party and bound by out-of-date laws.
Likewise, today many states do not recognize or address the risks and short-comings associated with unrealistically low bars of entry for real estate licensure.
Shoddy laws allow shoddy licensees.
Shoddy licensees often bring shoddy practices.
Real estate professionals don’t need and should not tolerate shoddy laws, shoddy licensees or shoddy real estate practices.
Steve Wiley and his wife, Mary, own and operate Smarter Choice Real Estate, serving the Lincoln, Nebraska, metro area.
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The views and opinions of authors expressed in this publication do not necessarily state or reflect those of WFG National Title, its affiliated companies, or their respective management or personnel.