I read an article from the NAR, that said the number of licensed realtors has dropped from 2.1 million to 1.7 million. So there are 400,000 less real estate agents over the past year. I'm not a realtor, but it seems like its "survival of the fittest" in the recent real estate downturn.

Fri Apr 25 2008, 12:55

Absolutely! Many new agents think it's glamourous and you just walk through pretty houses all day. You have to be knowledgable in so many areas and very business savy. Many are also shocked at the expense of being a Realtor. There should, at the very least, be a section of the course that clues you in to the money you will have to spend out of your pocket before you even close the first transaction. I believe this would "weed" out those who are not serious.

Fri Apr 25 2008, 11:36

Jeannette:
Congrats on Best Answer. I went with majority rules.

We've had a few posts recently reflecting agents in a bad light. This is a great concern of mine. There needs to be greater responsibility placed on the Broker-in-charge to oversee the agents.
Ruth

Tue Sep 18 2007, 23:13

This is one of those questions I ask myself everyday!

In my opinion, there is no barrier to entry. The test is ridiculously easy. I did mine online and took the cram course and had a license in about 2 months while I spent the rest of my time looking for a job, years ago.

As many have said, it's tough to stay afloat, but it still doesn't limit the number of unprepared, unprofessional people you have to work with. In addition, this also is hurting our image as Realtors. How many times has someone asked you what you do and when you say, "I'm a Realtor," they say, "oh."

It's pretty simple, Real Estate is a business, to the poster that said they don't tell you about the start up costs - what business is free to start up? Real Estate is the CHEAPEST business to start up. Let's see if you went bare bones, you would need a license (under 1000), a car (if you don't have one of these, then you really have problems) and some miscellaneous stuff to be able to see the homes and get into them. Now some would say, you need advertising and business cards and a website - NAY! You can knock on doors, pester people at the grocery store and the mall, sit in at open houses for other agents.

As the cheapest (legal) business to start in the world, and the one white collar job that has the lowest barrier to entry - Real Estat offers outstanding opportunities to those that take advantage of. In the end, you end up with 45000 agents in our metro area with only 9000 of those making a living.

I could ramble on all day long about this topic, but at the end of the day, the low requirements for new agents just makes me look that much better when going head to head against them.

I've never lost any business to another less experienced agent, and I don't think any of us could honestly say we'd close more than 1 deal extra a year, if the requirements were where they need to be and limited the newly licensed agents.

Sun Sep 9 2007, 04:03

I have taken the salesperson and broker test in NJ, and the broker test in FL. While each required time to study and memorize, I did not find any of it difficult. I probably passed my NJ salesperson test marginally the first time, as I missed the max time allowed of school, and never did any practice tests until the night before my last school class. I went through a 2 week M-F all day salesperson class, and read the book for the first time on the Thurs night before I took my school test on Friday. The night before my state test, I spent several hours reading the book and doing the practice tests. I am not a rocket scientist. The fact that I could pass my first test with no knowledge of the industry with this little of effort is a sad statement about the requirements to enter this industry. This is an industry where we are asking to public to trust us as professionals with the largest financial transaction that many ever do in their life. (I do feel competent, confident and qualified today in representing clients today as a result of voluntary education, experience and effort.)

I took FL Broker school in a 2 week M-F class, but I actually had an interest in learning the material, so I went to class every day, did my practice tests, and felt prepared for both my school and broker test.

I took NJ Broker school in a 2x/week format, and joined the class in progress already having missed the max time allowed. I was interested in learning the material, and found it mostly to just be 'review.' I understood most of the material quite well as I was not memorizing it this time around.

I think the education prep time should be multiple times more than it is, and the % right of questions should be substantially raised. It is way too easy to get a license. If the purpose of licensing and regulation is to protect the public, 2 weeks in a classroom and passing w/ a 70 is falling way to short.

I agree w/ everyone's comments about the true test is "Can you make it as an agent?" However, before the 'exit' or "turnover" many new licensees transact with minimal knowledge and that is not in the best interest of the public. We have massive turnover of new agents who do 0-2 transactions with no skill, knowledge, and in many cases, mimimal supervision. Increased entry requirement would do much to cure that ill.

It's way too easy. The public suffers for it. The image of the profession suffers because of it. Yes, we have some really great professionals in this industry, but the licensing requirments do nothing to contribute to this fact. It is only those that hung in there, learned the ropes, paid dues (labor not $$), and independently valued education. None of this is as a result of licensing requirements.

So, is becoming an agent too easy? My answer is way too easy. The public and our profession both deserve better.

Tue Sep 4 2007, 16:18

First, I was an agent for one year back in 1995 in NC and have no intention of being one again. I passed by salesperson AND brokers license the first time around which according to NC stats was unheard of. Most people took the salesperson's exam two or three times. My very first month in business I was top listing agent in both NC and SC combined. So even with knowledge and skill, as Jeannette (and probably others here) said, "it is easier to become an agent than it is to stay one."

Choosing Best Answer is almost impossible. I'm considering Jeannette simply because of majority rules and the above quote. I like Pam's answer because of "the blind leading the blind." Ntfeldman and Deborah (and others) bring up excellent public and government issues. I've read through all of these posts several times and believe everyone should as well. I'm not choosing Best Answer just yet in case readers would like to influence me further with their thumbs up on the answers.

Finally, I came up with some of the stats I was looking for. I looked up what fields require licenses in IL and the only ones close to the same sort of impact on the consumer with such low level entry qualifications would be: Home Inspector, Appraiser, Roofer or Contractors, Other sources were found at Realtor.ORG's quick facts library FAQ. However, I never have given much credit to the NRA's unscientific statistics.

The typical REALTOR® has a median gross personal income of $47,700 in 2006.
Dr. James Webb of Cleveland State University, cites studies that indicate real estate turnover may average closer to 50 percent within two years.
And the web site listing all the Real Estate Commissions in each state (plus others) is: http://recenter.tamu.edu/info/statelic.html

Help me decide who deserves Best Answer.
Ruth

Tue Sep 4 2007, 14:58

Yes....More education and perhaps an apprenticeship like home inspectors. X number of closings, before you can do one on your own. I don't like it for a couple of reasons. One is I see people waste a lot of time and money on a career they think is easy only to drop out a year later. I'm sorry to see them waste the money. I think it also takes a toll on the sellers. Everyone has to start somewhere, but you do gain a certain level of expertise over the years as a full time realtor. Doing one transaction a year for yourself or a friend or neighbor or someone in the office is just not a professional way to do business and puts a stigma on agents.

Mon Sep 3 2007, 13:48

Hi Ruth, This is a great thread, thanks for starting it (yes, I remember you and your lovely home. I hope you didn't take offense to my suggestions on the photo)

The issues are divided between state requirements and NAR. Both are collectively responsible for who gets the license (states) and who can support themselves with it once they have it (NAR, generally but not specifically).

I like some of Deborah's suggestions and I'm so disappointed to hear Jennifer's comments about the architectural industry (but relieved because I got out of architecture school in the late 80's when building construction crashed). Architects do work so hard and are held to such high standards. It's surprising to hear they struggle so - I had no idea.

The problem with the problem is that it all starts at the state level - and it's always going to be different by state statutes. AND it's not like consumers really have an option. Use a licensee or ? - what? Use someone who's not licensed? Well that's hardly an option (and illegal on the part of the representative in the deal unless they are a lawyer) Or? Don't buy a property in that state because you don' t like the licensing requirements of the agents. People just don't make choices that way. They are subject to the legislature and it only comes up 3-8 times in their lives and not always in the same state so what do they do? They do nothing when things go well and they complain when they don't but they don't really get involved in the legislature (did you know NAR is the single largest lobby in DC????)

So it's first and foremost a legislative issue. You're a voter right? You're a property owner right? Guess we can all write a letter to our representatives asking them to raise the bar.

Alternatively there are designations (continuing ed that actually can help an agent run their business) do help both the public and the agent. They are voluntary and do show a commitment on the part of the Realtor to grow in their field. But unfortunately the public really doesn't know that much about the designations and what they mean. So you don't go looking for them or require them. There are lots of them too and some are easier to get than others.

In the commercial sector the acclaimed CCIM designation requires both a minimum level of closed transactions (volume of units or dollars and it's no fluff, you're doing some real work to get to these levels as they are time trialed) and 5 wonderful courses that focus on solving client needs as well as a special exam and a case study submission that requires the candidates to show how they used the courses in real life situations. I am on schedule to get my CCIM next year and I'm very excited about it. It is a subset of NAR in the commercial division and in my opinion they've done things pretty right here. In general the CCIM is a well respected designation and all the people I've met along the way that have one know what they are doing! (I am also a CLHMS (Guild level) a GMS, a CRP and should be (this week) a CIPS). I had so many years in the business by the time I learned about CRS and GRI that I decided to skip them but they are great designation and I HIGHLY recommend them to new agents entering the business for a wide variety of reasons.

I'm Curious, what stats were you looking for? I have done extensive research on this matter (which is where my numbers in that last post came from) and I do my own local research - and it's very very interesting to see how the pie is divided.

At the end of the day - the super human work 24/7 "top producers" generally have assistants at the very least as well as buyer's agents and listing specialists developed in total teams. The most efficient agent I know in the Tampa market (with one full time assistant) closes $30M in a given year. That's aprox $750K in GCI (he's at a 100% brokerage and used to own his own firm and gave it up to get out of the admin of the business) before his split with his assistant (who is his significant other).

I know there are others who close $50M and more but they aren't doing it all themselves, in some cases, they aren't doing any of it at all. There's a family team here that has the son and daughter working the team, overseeing the other agents - there are 10 people on their team. They closed $42M last year... that's only $4.2 per person on the team (slightly above ordinary performance for a full time professional, really). At various split options that's about $100K. Good, not rich

At the end of the day, I still go back to the consumer. If they hire their sister in law's cousin because they can save a few buck and she's reading the book while she's filling out the contract, then they get what they deserve. You would think that the level of investment in the service would warrant more care in the choice (but the pay-from-proceeds business model changes the way people think about price)

This has been an interesting thread

Mon Sep 3 2007, 11:33

Forgot to mention one thing you don't learn in a cram course. The expense of your chosen profession. With the price of gas & vehicle maintence, fees, fees and more fees, ads and marketing, etc. etc. As independent contrators, WE PAY EVERYTHING!! I don't think most Buyer's and Seller's understand that. It's also a 24/7 job with an occasional vacation.But, even on vacation, we still have our expensive laptops, trios, cell phones, etc. .....so we always ON Duty. Right? God love us. And they say we have it made in the shade.......Hmmmmmmmm

Sun Sep 2 2007, 22:29

Yes, Yes, and Yes. In a Nutshell!! A Real Estate Pro is NOT learned in entry schooling. I think someone here mentioned writing a book. Would be a best seller!! But, can't imagine when you could find the time to write it. If you're considering the profession, read her book 1st. Honestly, I've been in management and actually owned a business. Real Estate is the most difficult, demanding, exhausting, frustrating, irritating, awesome and rewarding careers anyone could choose. Criteria: you must love people, have the patience of JOB, be sincerely blatantly honest and you will be great.
In closing, I do think it's way to easy to become licensed. A 4 yr college might be ideal. LOL

Sun Sep 2 2007, 22:12

Wow I just read all 25 answers, it must be fun for you Ruth to pick at brains... :)
personally the class exam was simple but you really do have to study ..... the state exam was not that simple for me...I was nervous, and I really hate taking test even if I know the material....

I dont think that NAR is just hoping that they get more agents so they can make more money.... I strongly believe that they offer many different classes and designations because they strongly believe that continual education ( CE) is of very high importance, of course there are some mandatory CE atleast for the state of Illinois.
because our income is based on sales, I dont think its the brokers job to tell you when your ready to go out however I think they play a huge role in preparing you.......
I think in RE it's not only experience in contarcts and listing and CE that makes a difference .....

I think you have to have thick skin and a great personality to stick it out, and always always be yourself.....
because we are all unique individuals, and our personalities will attract those that can and will work with us................
and for those agents who got their licence just to help their family and close friends I don't mind that at all...... " More clients for us" :)

Sun Sep 2 2007, 21:16

It may be easy to get your real estate liscence when compared to other professions that offer the same income producing potential. However, to actually be successful enough to make this a career, let alone successful enough to actually generate that type of high end income is far from easy. The wide range of skills, knowledge, integrity and work ethic that you need to master and implement every single day in order to succeed in this business sets us apart from many other professions.

Sun Sep 2 2007, 11:49

I like this question. The problem with real estate is that the educational requirements and the test are fairly easy compared to other professions. I think that's part of the reason why the general public has a hard time recognizing us as true professionals. Basically, anyone with a highschool diploma can take the required classes and pass the test and sell real estate. I know I run the risk of getting a few thumbs down on that, but it's the truth. The ease of getting into the profession is the reason why so many became agents after the dot.com bust. I don't think you necessarily have to have a college degree to be able to sell real estate, but you have to have a solid understanding on how to write up a contracts. Considering the liability that's attached to sell these valuable assets, I think more hands-on training should be required before an agent can sell. I also think that the brokerage that hires new agents should offer solid training and have a mentoring program. Actually, any time a brokerage hires an agent, they should not assume that the agents knows what they should know because they have been in business for a while. I hate to say this, but I have encountered a few veteran agents who had done the wrong thing for 20 years. 20 years experience could be 20 times 1 year experience.
Lastly, the fact that many agents don't survive the first year in the business I think also proves that it's just too easy to get the license, but it's not so easy to make it in the business.

Sun Sep 2 2007, 11:04

When the house sells, I'm sure I'll loose interest and never write the book. See my question about the honeymoon.
Ruth

Sun Sep 2 2007, 10:17

Ruth, You're going to have one heck of a book ;-}

Sun Sep 2 2007, 10:13

Okay Deborah, I hit a nerve (by me asking or Jennifer by answering). Sidebar: You just reminded me of two of the most sophisticated ladies I know. They were both from very rural, poor upbringings. They went to great lengths to become professional, educated, polite ladies. Everyone always respected them, even when they got mad. But when they got mad, that thick "back woods" accent would poke through. It just made me respect them even more.

Back to the issue.
The bigger implications are exactly what you said - the public is at risk! The entrepreneur problems is that even under the guidance of a Broker-in-Charge, the agent is an independent contractor. When I complained about an agent to a Broker-in-Charge, his comment was, "I inherited her." Implying that she wasn't any good. Because she was an independent contractor he couldn't "fire" her.

Last night I started to respond and didn't. Instead I searched to find a list of what is required for different states. I searched for the average "poverty level" income statistic I heard before about real estate agents. I didn't find exactly what I was looking for, so I went to bed. I did find some generalizations and the requirements do vary widely from state to state. The question is, has one state had more success than another in their results?

Ruth

Sun Sep 2 2007, 10:10

A singer or athlete is not risking harm to the public when they are not as qualified as the next singer or athlete. .

Real estate needs to have the pubic interest at the heart of this matter. Not true for singers, actors or athletes. Additionally, with singers and athletes, those doing the hiring and risk taking are entrepreneur taking business risks. Homeowners selling their homes should not be at risk due to minimal training or education.

Sun Sep 2 2007, 07:34