I think the licensing process should include a year-long intership, or aprentice program, along with one year of formalized schooling, afterwhich the student earns a two-year real estate degree and license to sell.

The challenge is that the states’s are making a lot o fmoney licinsing people, but I look at it like this- if we really want to protect the consumer and earn our designation, we can’t continue the revolving door- if it takes two years to get a license to cut hair, why not to sell people’s largest investments?

http://blueroof.wordpress.com/2007/01/25/real-estates-revolving-door/

Here’s a post from a while ago, which speaks more about this.

I’m glad that there are several models testing that now. So far, I don’t see it working well, but it hasn’t been tested for very long yet.

I was a salaried fiduciary for many years before I switched to real estate, so it’s hard for me to say. But I’m watching the salaried models.

So far it has the same employee issues as most companies. A few are great. Many are not. Doesn’t work for sellers as well as buyers, and the employees are about as good as new agents for the most part. So there are times when a salaried agent and newer agents are pretty much equivalent.

But employees get judged and get bonuses based on volume, so the pressure to “get” clients is probably about the same. In fact salaried agents can have more pressure to produce than many commissioned agents.

I’m not entirely sure this would clean up the industry. I do believe broker/owners would clean up in profits.

What do you think about the idea of an hourly rate?

Change the way they get paid – to salary instead of commissions
and see how the industry cleans up magically

Licensing law officials are charged with balancing the needs of the industry with the needs of consumers. Licensing officials are only concerned with bringing the business practices of individual agents and brokers up to and in line with state and federal law. Going much beyond that is not on their radar, nor should it be. It is up to the individual and collective members of a professional industry to take it from there and move the industry forward.

As it is now, a consumer can still choose to sell his or her home by owner. A buyer can choose to buy the home from the listing agent and negotiate the listing agent’s full fee downward and pretty much be on his or her own when it comes to representation.

A consumer can ask any real estate agent to take a lower fee for the same service. I would bet that if we took an anonymous survey of a wide range of agents from experienced top producers to brand new agents, we would find that all agents negotiate their fees up and down at one point or another. Some folks don’t like to use this as a selling point or remind consumers that fees are negotiable. If a consumer doesn’t know that fees are negotiable, the consumer looks for other low priced options!

Another (better?) way of doing this is to definitely give the consumer several options on different pricing structures and what the consumer will receive at each price level. All duties required by state licensing laws are discharged, but the manner in which they are discharged varies.

The broker/agent combo with the best service at the best price wins. HOWEVER, it’s not the broker/agent who decides the definition of “best,” it is the consumer who votes with his or her dollars. That is how the consumer wins.

Right now consumers are discovering, some for the first time, that the price they paid for the best service they ever received from an agent was negotiable.

The way the industry wins in all this is to raise the standards across the board for ALL licensees.

Now match all that against consumer demand for lower fees. There should be a simpler way for consumers to get better for less. Maybe you are correct that the only answer is for the broker to make more, for change to happen. But I don’t think so. I think licensing is more concerned with the consumer getting more for less, than Brokers making more.

If government officials are bending to brokers vs. consumers…there’s something rotten in Denmark.

If real estate agents and Realtors want to raise standards, as I blogged about here:

http://www.raincityguide.com/2007/03/24/professional-status-perceptions-and-reality/

I recommend:

1) Doing away with dual agency. In any other professional group, no professional could ever adequately represent both parties who have opposing interests.

2) Raise standards across the board: more and/or higher quality pre-licensing and post-licensing education.

3) Higher ethical standards with sanctions for violations. A code of ethics not enforced is not very helpful for the professional group who would like to be respected in the eyes of consumers.

4) Within each state, change your agency law duties from statutory to a clear fiduciary level.

5) Create a tiered licensing system and manadory supervision so baby real estate agents can be differentiated from the pros. Arguably, highly seasoned agents will be worth more in the eyes of consumers.

Now a consumer can choose: baby Realtor for fee X or seasoned vet for fee Y.

The appraisal industry has a tiered approach to licensing, escrow (in WA state) has the designated escrow officer position and the highly coveted L.P.O designation. We are the ONLY state in the US that allows escrow closers to obtain this designation. The test is extremely hard and Limited Practice Officer closers can command a far higher salary.

I see a future with tiered licensing.
I do not see Galen’s future with no licensing. In the narrative history of any profession, there’s always movement toward requiring more rather than less education, testing, and so forth.

So how does this happen? It is up to all of you. If the industry wants it, it will happen. HOWEVER, let’s not forget the economic and political factors. If it will make corporations more money, it will happen.

The company that can figure out a way to put the consumer’s interests first AND make a profit is where we are today.

There will always be that tension between what is best for the consumer and maintaining profitability.