California realtors make a call for higher standards…

There was an interesting article (requires a subscription) on Inman yesterday about the California Association of Realtors ( pushing for higher licensing standards. CAR’s president noted that currently in California someone who cuts hair requires more training than real estate agents to obtain a license for their profession.

I applaud the fact that the industries own are finally calling for improved standards — though I’m not sure they are asking for a high-enough bar, but that’s just my opinion. Currently in Washington, the Department of Licensing requires you to be at least 18-years old, complete 60 clock-hours of training and pass the state exam with a score of 70% or better.

I personally would not want to be represented by that agent who scored 71%…I’ve already met enough of them across the table. It’s not all bad though…Let me also state that I HAVE BEEN impressed with the quality of agents hired by some of the more well known brokerages. They have displayed the professionalism I wish we had across the board in this industry.

So what do you think? Is 70% a reasonable bar for licensing? Should an AA or Bachelors degree be required? Is it the amount of clock hours that matter or the testing to demonstrate prociency in what you’ve learned.

18 thoughts on “California realtors make a call for higher standards…

  1. The quality of agents in King County is as varied as the county’s population, incompetent or negligent agents usually don’t make it in our field and I agree that most of our colleagues are talented and diligent. However, there are far too many people, many of them first-time homebuyers, who receive substandard service from their Realtors and agents.

    I think that increased standards would be very beneficial for our industry. I don’t think that a college or university degree should be required, but it should be possible for someone with a specialized college degree in real estate marketing or real estate practices to forgo the required 60 clock-hour course. Current broker-level education standards should be applied to all agents.

    There was some hubub about requiring all new agents in Washington to achieve a higher standard of education, and the new requirements were to go into effect after July 2007. Has anyone heard if this is still in the works?

  2. Christopher,
    The “higher standard of education” I have been following was tied to the “Broker Only Licensure” issue, which has been delayed. Under the proposed draft I read back in the summer, the hours would increase from 60 to 90.

  3. Robert,

    Having been licensed in five states, I can attest to the fact that California’s was the easiest and too easy. I did most of it while my three girls were eating a pizza. No hourly requirement when I acquired my license there in 1999 or so.

    The best were NJ and Florida.

    I can tell you that the key is at the Real Estate School level first, both CA and WA being inadequate in that regard. Secondly, the manner in which the State Exam is worded, accounts for the remainder of the inadequacies, both CA and WA sharing equally in the shortcomings.

  4. I think I already quoted Department of Labor somewhere on this blog – Real Estate Agent counts as a sales person. It hasn’t reached that level yet to require higher education. But I think its slowly getting there. Even though everything is moving toward technologies and continues education – I don’t think a degree is necessary (well, I have BS in Management/Marketing, but US government doesn’t allow me to become a REALTOR, just because to be a an agent degree is not necessary, they need me working in a field within my degree), just look at the kids today – a lot of them are hang up on the Internet, programming, technologies etc. (still being under age) and when they substitute the old school agents – the competition is gonna be higher, may be then something will change and people will realize that they need more to be able to compete.. like higher education. I think in the US, higher education means something much more then becoming a Realtor. Agents think so and their clients think so too… it’s gotta start changing somewhere.

    BTW, is this the workbook agent’s in CA use to get their RE license? I gotta get me one of those, used for $3.

  5. I just asked Robert”s questions of my 19 year old daughter, who acquired a WA real estate license about six month’s ago.

    “Is 70% a reasonable bar for licensing?”
    She answers: “It is irrelevant. It is the nature of the questions that is the problem. Getting a 99 on that test wouldn’t prepare you for the actual real circumstances involved in the real estate field.”

    “Should an AA or Bachelors degree be required”.
    She answers: “No. No degree should be required and having an AA degree with no classes involving real estate would make no difference. Being proficient in math and english should be more of a requirement, but clearly someone can be proficient in these areas at high school graduation. Real Estate is a field that requires practical experience to become proficient.

    “Is it the amount of clock hours…?”
    She answers: “Online clock hours involve hitting a button every four minutes to pass the required amount of time. Increasing the hours might give you a finger cramp, but not more knowledge.”

    “Or the testing to demonstrate the proficiency of what you learned?”
    She answers: “The classes and testing do not prepare you for the practical applications. After taking the course and test, I thought that if you discovered that a mall was encroaching a foot onto your property, the mall would have to be torn down. My Mom explained that if it were a storage shed, then you might be successful in an action to have the neighbor remove the shed. But if it were a mall, encroaching by 2 inches, it is not likely the mall is going down.”

    “The questions should test the practical application of real life situations in the field of real estate. Sure, I could tell you the difference between an addendum and an amendment. But spending more time on the contract and various addendums and amendments we will use in real estate, would have been more useful than knowing the definitions. Writing an acutal contract, for example, would have been more useful. You have to forget pretty much everything you did learn, and begin to learn what you really need to know, the day you pass your State Exam.”

  6. It’s nice to see that there is movement towards credentialing for our allied real estate professionals in lending–I think in early 2007 it will be in place?

    Russ…could you chime in here?

    I wonder if no law degree would matter to you. Since you really don’t get practical experience of litigation in law school, then your law degree would be moot, right?

    Ardell, no disrespect to you or your daughter at all. Honest.

    True, the exam is a fundamental excercise of definitions and not practicle experience. But, the idea of setting the bar so low or mentioning that a degree or the test or continuing education hours needed etc. is useless, is not helpful to the image of Realtors. It reminds me of the WASL education debacle in our state. I recall reading a front page article in the Seattle Times that WASL scores were “increasing” in King & Snohomish high schools. The funny thing was that the categories reporting, math etc. were still failing. For example they moved up from like a 40% pass rate to 50%. So we went from failing to failing better.

    Maybe the real estate community should take the LPO exam rather than the Dept.of Licensing exam? It is largely scenario based. Last fall ’05, only 44 people passed vs. a couple hundred sitting for the exam. When my wife went back in the business a couple years ago to re-activate her LPO crendential, only 11% passed in her group. And the vast majority of these folks sitting for the exam were people already working for title companies and escrow firms, all who had practical in-the-trenches daily experience.

    I assure the readers of this blog that a portion of problems associated with difficult closings are the direct result of lack of knowledge of real estate fundamentals. For example, we had a deal come in where a seller on a p & S really wasn’t the seller. In other words they were not even on title. If Realtors are the conductors in the orchestra, then they do need to be able to read the music.

  7. I think one issue is has the ability to take the class online been a positive or a negative if people are not getting the full amount of hours of education by taking it online. If you pass the hours by hitting a keystroke repeatedly, that can’t be of benefit.

    Also, when I mentioned NJ and FL being better than CA and WA, it could simply be time vs. area. When the questions in the exam are identical to the questions you studied, you can memorize them. In NJ and FL, the questions were worded in a way that tested the knowledge rather than mere memorization. In CA, the answers were even indentically listed, so if you remembered the answer was B., you passed the State Exam.

    In Florida if you failed the School Exam, you had to take the entire hours over again from scratch without having the opportunity to keep retaking the final school exam over and over until you passed. Tough, but effective.

  8. Tim

    You are correct regarding the new mortgage broker law. It was just passed and goes into effect on Jan 1, 2007. WAMB

    One thing that I hear often is that buyers and sellers need to use a “real estate professional

  9. Count me for wanting serious licensing standards for Real Estate agents, and not just barriers to entry in the form of high fees or long hours of classes. Higher STANDARDS = more higher passing requirements (how about 90% or better, to start?) and realistic/useful curricula.

    I think we need an SEC of real estate, with licensing requirements on par or more challenging than the series 7/63 for those that deal with securities. Colorado is one of two states that doesn’t regulate mortgage brokers – which scares the hell out of me, particularly when I’m dealing with a buyer who is using an unknown broker/agency.

    While I’m on this soapbox, throw in my vote for tougher motor vehicle licensing as well. Man there’s some crazy drivers out there!

  10. I’m all for increased licensing requirements. I see too many new agents who are a liability to their clients, their brokers and themselves. Will increasing the clock hours help? Probably a little. Making the test harder? Probably. What about increasing the CE required? Seems like the good agents are taking 3-4 times the required CE.

  11. I for one am all for increasing the requirements…. I took the test in California and it was a joke. You can do all of your school work at home and have a friend proctor the test for you.

    Then there is drivers license testing… don’t even get me started on that….

  12. Pingback: Seattle’s Rain City Real Estate Guide » Raising the Bar

  13. I just completed the WA real estate course online. It was fastinating at first, but became boring at the end… not enough real world content. It was obvious that it was primarily an exercise in memorized terminology and everything is geared toward “passing the test”, not serving the client.

    The material was scattered in so many directions I found it very difficult to fully understand each concept. I have no idea how someone could begin to properly function as an agent with the present 60 hour 70% test passing criteria.

    My little 60 hour course has turned into a 300+ hour juggernaut. I don’t particularly care what my score will be when I take the test, my primary objective is knowing the material and the business. And this goal is not served well with the current cirriculum.

    The Real Estate biz seems to be stuck in the stone age education-wise. It will be interesting to see if I can survive in an industry that does not pride itself on education of either the professional or the consumer. I’m going for it though…. I fully intend to buck the trend and provide the public with all the needed information that is relevant to their purchase.

  14. Although I agree that the real estate profession needs improvements, I don’t believe that requiring a degree should be a prerequisite to entering the field. Currently, real estate is one of the few industries where experential learning counts and financial success is dependent on an individual’s commitment to performance.

    The emphasis placed on degrees is a generally accepted social edict that incorrectly assumes that a person with better educational credentials will outperform the person with less education. However, there is little to confirm that a degree is indeed an indicator of performance and competence.

    So, I believe that the views expressed by Ardell’s daughter make a lot of sense. And would argue that self-employment and business courses are what agents need in addition to the current curriclum in order to become the professionals they truly are. Most agents are sole proprietors or micro-business owners even when they are associated with a broker because they are statutory independent contractors or “non-employees.”

    This is a legal Congressional designation that applies only to real estate agents. There are no other service professionals in the country that fall under this classification. But it was several years of practicing real estate before I learned of these facts because they were never taught in real estate school.

    Once an agent realizes that he/she is in fact a business owner, it becomes incumbent on that agent, and NOT ANYONE ELSE, to ensure the success of his/her business by obtaining the necessary technical skills to perform effectively for which several options can be utilized (e.g. college courses, seminars, e-learning, independent study, libraries, bookstores, etc.).

    But, unfortunately, agents are not privy to these readily available resources, and instead taught to behave as salespeople and not as business people. I believe this to be one of the major dilemmas facing the industry and that more attention should be focused on this area, instead of looking for ways to create a “perception of competence.”

  15. While maintaining a certain standard is good as a whole…hasn’t being a real estate agent always been about relationships? Only in the past few years has there been such a huge surge in “Power Realtors” or however you want to call them…but at the end of the day, most transactions are completed through a “circle of influence” that is in the domain of an individual real estate agent, regardless of a 70% score or not. I personally work with about 115 agents in the Northwest because I represent the interests of a company call Ubertor. So when it comes to raising the bar, how far is too far? Because I surely don’t want a real estate agent to become a more corporate entity…I personally like the relationship.

  16. Why don’t they lower commissions instead of trying to raise the testing requirements. I don’t care if my realtor scored 100% on his exam, he isn’t worth his commission.

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