Revamping Real Estate Industry Training

The real estate industry NEEDS some revitalization when it comes to licensing and agent training. There are easy ways to do this and the benefits FAR outweigh the work – better prepared agents, fewer lawsuits, higher satisfaction levels and legal protection for buyers and sellers…why would the industry NOT want to do this? Well, in a word: politics. Those in power never like to change the status quo, especially when they are benefitting from it (think of all those agents who take the tests – money to the state agencies – and those who hang licenses with brokerages – money to the brokerages.

But now is the time. The time has come. No more stalling – those in power, be it the National Association of Realtors, the California Association of Realtors, all the local associations (we have several in San Diego County), and the brokerages….it is time to REVAMP REAL ESTATE.

THE PROBLEM:
Many established fields require a set number of hours of experience prior to taking a licensing exam. In fact, real estate is one of the only fields where this is not required, yet we are allowing non-attorneys to draft contracts for the sale of properties! This is simply crazy. In California only attorneys are allowed to draft contracts, yet our standard CAR contracts allow any licensed agent who has hung a valid license with a brokerage to draft a contract. How? By providing “fill in the blank” forms.

The problem here is that many agents fill in the blanks improperly, don’t truly understand what is being asked nor understand the legal ramifications (and many frankly don’t care)…combine that with a lack of broker oversight (especially if the agent works for a “mill” brokerage – one that has hundreds or even thousands of agents, and it is obvious why there are so many real estate lawsuits, a majority of which are based on negligence!

Here are some suggestions:

1. Entrance Pre-Requirements. Mandatory mentorship for agents prior to being allowed the privilege of taking the exam should be a requirement. Many other licensed fields require this, like contractor licenses and other trade fields. Agents should have to complete a set number of hours or transactions with an experienced agent, and there need to be mandatory training requirements set for the agent to master during this period.

2. The Real Estate Agent Examination. This exam is frankly a joke and needs to be rewritten and made more difficult, AND there should be a higher fee to sit for the exam. Today all one needs to qualify to sit for the exam in CA is proof of completion of a course, no criminal record, minimum age of 18 and a heartbeat. The courses are simple, most of the questions on the exams can be found online. It is simply a matter of repeating practice tests over and over until one recognizes the questions. WHEN DEALING WITH LEGALITIES THIS IS NOT ACCEPTABLE – memorizing answers is the opposite of understanding responsibilities and legalities.

3. Mentoring. As mentioned in number 1, this is important and should continue after an agent has been licensed. For how long and to what degree can be discussed prior to implementation. Maybe it requires a “check-in” with the mentor upon drafting the first several contracts, and a lot of mentor or broker oversight, at least until the agent is familiar with the forms, responsibilities, legalities and consequences.

4. Continuing Education. Again, this field needs to be improved. Current continuing education comes in many forms, and the majority of them do not truly teach the agent anything. Merely, they are a means to get the requirement out of the way quickly. We need to rewrite the requirements for continuing education for agents – maybe not as strict for brokers but still, laws change and lawsuits impact our industry constantly. Agents need to be up to date.

5. Eliminating Dual Agency in California. Dual agency (when the agent or broker represents BOTH the buyer and seller in a real estate transaction) is allowed in CA but some other states ban it – and justly so. If you were being sued would you want the attorney who represents the opposing party to also represent YOU? Don’t worry – this is not allowed in law, and all the more reason it should not be allowed in real estate transactions. Agents like it because they make more money, and many sellers like it because agents tend to cut commissions when this happens so they save money, but it is a Pandora’s box when it comes to legalities. How can an agent actually perform fiduciary duties for opposing parties? Answer: it is not possible.

These are just a few ideas…I have many more. But the bottom line is that our real estate industry needs to teach agents more responsibility and make the field tougher to penetrate. Once that happens real estate agents will be valued more, real estate lawsuits will dwindle, the industry will function more efficiently, and most of all, buyers and sellers will be MUCH better protected. This is not a suggestion, this is NECESSARY. Please help spread the word!