Having said this I didn't think it was all that easy. It was easy to commit to doing it - but I for one had to study hard and still continue to learn everyday.
What other profession can you compare it to? Plain and simple, we are in the strangest profession I can think of - we get the job or we don't get paid. Even if we get the job - chances are we won't get paid anyway.
It's not a profession for the squeamish or the person looking to make a "fast-buck". It "ain't" gonna happen!
Most consumers can't grasp the concept of "no pay". I've had to explain it innumerous times to people - they think the broker gives me a salary - and the commission is "easy money" - likened to a bonus of sort.
So, no I don't think it's that easy - but I think anyone interested should think long and hard about what it takes to stay one.
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
Jennifer, I wish there was a way for the public to understand how low the pay really is for the very vast majority of agents. The ratio of pay when you look at hours that real estate agents work is very low for the huge majority. Really, Jennifer, I am not saying this as a whine or pity party. The public's perception of â€œsell two houses and make a boatload of moneyâ€ is so very far removed from reality. Whenever I see agents try to explain what it is really like, a war nearly breaks out. I wish I knew a solution. I have seen potentially great agents leave the industry because they felt they were working harder than ever before, barely able to pay their bills, treated with little respect and criticized for being overpaid.
Just as there are some architects who make huge incomes, yes, there are few agents who do the same. That, however, does not reflect the majority, and I will qualify my statement further. The majority of full time real estate agents do not make overly impressive incomes. Not to say that none do. My purpose here is dispel some myth that all agents are wealthy wastrels who collect huge fees for no work. So, my question for Jennifer is............How does the industry overcome the misconceptions of the public? I would treasure and welcome the oppty to have an in depth conversation about that with you.
Ruth, yes, yes and yes again.
The fact that someone can go to school for 2 weeks, pass a test and in less than 30 days from starting class be deemed capable of representing a seller or buyer in a real estate transaction is wrong. Diane said it well in her identification of revenue generation for the associations. An addendum to Dianeâ€™s well written comments: The real estate commissions also generate income from licensing fees in addition to the associations. In NJ, continuing ed was shot down and the reason quoted many times was that too many licensees would drop out. The lobbyists against continuing ed in NJ were the big referral companies who maintain thousands on their roster for limited annual fees who are not members of MLS or any association.
I donâ€™t agree that minimum transactions should be a licensing requirement. I can think of dozens of examples where a license would and should be a requirement and the license holder may not transact. Just a few, a licensee working for corporate entity, builder, relo company; a licensed assistant working for broker or agent, a broker who spends more time with agents than writing business individually, and I could go on and on. Making too many types of licenses would only burden real estate commissions, increase bureaucracy, and further muddy the waters of public perception. I do strongly vote for (on my own ballot, I guess!) a two-step licensing program.
Borrowing from the appraisal licensing, or even professional trades such Jennifer indicated the internship requirements for an architect. I have long held that it is wrong that the licensee who passed their test last week was allowed to go represent any transaction of any size. While one can say the broker can manage this, this is not a management issue. It is a licensing issue. Why have any licensing requirements unless they have a purpose? So, here are the rules I would propose:
Two step licensing: 1) Provisional - allows you to act on a transaction as a secondary licensee on that deal. 2) Full License - Awarded after provisional requirements met. Requirements for a provisional license would include substantially increased educational requirements in both real estate classes, and other general ed. A college degree could be applied to meet some of the educational requirements. A full license would be obtained only upon meeting both production in transactions and additional educational requirements. Continuing ed would be a requirement to maintain any license. Only those with a full licensee could represent transactions in a lead capacity. The public would then be assured of education, practical experience and commitment. It would raise the image of the profession, and weed out licenses that exist for convenience only.
We Realtor's have lobbied for tighter restrictions and our governor has vetoed the last two bills for stricter requirements. He did not want to preclude anyone form starting a business to make a living.
You can obtain a California Brokers license with a 4 year degree (in anything) and no experience in RE sales. Then you can take that license and open a brokerage and hire new licensee's. The inexperienced broker hiring and training the new licensee or blind leading the blind. I believe this has contributed to some of the problems we are having in our industry.
We finally just got some legislation to no longer have a conditional license. The Realtors will no longer have the 18 month grace period to complete their education. I believe this goes into effect in January.
We are working on stricter requirements for continuing education. Now we are required to complete 45 hours every 4 years for license renewal.
We are professionals dealing with our clients life savings and assisting them in making one of the largest financial decisions in their life and should be educated as such.
For whatever it's worth - I think you should consider a different photo angle for your property. Have you tried showing it from an aerial or elevated photo? Personally I don't think your main photo shows the true beauty of the elevation of the home.
Each state's requirements for licensing are different. I was licensed in Texas, they have it pretty strict there to be a broker. Few REQUIRE a college degree. Per transaction compensation is reasonably high so you don't have to do too many to eek out a living - it's a great supplement to your retirement income here in Florida. Everyone has a real estate license here. Why not? Two weeks and a test. I don't know anyone who wanted to get a license that failed and chose another profession (like some do for medicine, law and accounting).
The residential brokerage industry is broken Ruth. The pricing model to homeowners is too high, the quality of the agents is too low and the reputation of the industry reflects the business model.
Would more education requirement help? Sure. Would the public get a higher quality of service? Why not? Would it be better for the remaining agents? Barriers to entry always produce a more profitable market for those on the inside. Why wouldn't existing agents want greater protections? But they won't be coming.
NAR won't push for it. No way. They make their money on members. More members, more money. They use the anyone can choose their agent, free country, anyone can be an agent, free country argument to demonstrate that there isn't any price fixing in the business (which there truly isn't) but 25% of all agents have been licensed less than 1 year and over 1/2 have been in the business less than 3 years.
If your objective is higher skills then greater requirements are the solution. But it has to be mandatory not voluntary and that's just not going to happen.
Consumers have to care more about the hiring process and demand a higher level of skills and education from the agents they chose. For as long as people are willing or forced (bosses wife has a license) to employ people with entry level or poor skills - and others see those newbies succeed in making a living, still more will venture into the pool and divide the business pie into smaller and smaller pieces.
Solution, sell your skills and education. Work smarter and leave the nuisance clients to the newbies.
I have found this career to require a lot of hours, a mental investment, dollar investment and personal commitment. I mean what other job could you go to ...work an 80 hour week and still NOT get a pay check from? You need to keep educating yourself, work with a mentor if your new office offers that option and be consistant. You can't just try it out, or test the waters, if you want it you have to get after it.
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.
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.
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.
Actually, the entry is only an awareness calibration and test that gets you a license from the STATE. All the state cares about is that you understand all of the potential trouble spots and liabilities so that you KNOW, or SHOULD know where you are failing to protect the taxpaying consumers (citizens) that the state is responsible for.
Very little of the 90 hour calibration will help an individual market or sell real estate. Unfortunately, so much of what is available currently as training from either companies or the vast ocean of real estate training consultants is rooted in what worked 20 years ago. This stuff works today, but not as well as it did 10 years ago, and will continue to decline over time - increasing in velocity on it's downhill plumet - because of this here internet we are talking on right now...
Fortunately, many of the newer Realtors are coming from previous jobs where they learned how to approach business differently and have a new perspective on how to do things. They have worked collaboratively in groups and know the value of relationships. And, if they are working in the newer business model companies where information sharing is open, they will find their way quicker to personal success and be able to sustain themselves on good practices.
A higher quality workforce would be had in Real Estate if the entry requirement was geared toward an increasing level of certification (4 or 5 levels) covering around 450 hours of class time. This would reduce the entry level deadbeats and people who only want to sell their parent's and their house and only those who were geuinely serious would continue. Also, "grandfathering" should not be allowed. Get those old warhorses back into class and make them learn ethics and everything else that new Realtors need to continue in business.
But it's harder than the test I had to take to become a parent.
Anyway, before I tangent again.... the test was easy, but I don't think passing the test is what makes a good real estate agent. I actually know a brilliant agent who failed her test the first time. So she's a bad tester.
But her instincts and ability to think outside the box? Wow.
So, in essence, there are lots good test takers out there who are come out loose cannons with licenses, and that is what is scary.
Post-license support and mandatory education and mentoring is a must. Paul is right: brokers DO have a responsibility to the agents they hire, and they often drop the ball.
Then again, unless one implants a tracking device on an agent, it's next to impossible to know what they are doing, so perhaps the solution would be require an "internship" of sorts after the exam is passed, but before the license is allowed to be hung.
Now, off to review the manual I wish I would have paid closer attention to: "Raising a 6-Year Old Girl: Your Ears WILL Bleed"
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.
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 REALTORÂ® 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.
In closing, I do think it's way to easy to become licensed. A 4 yr college might be ideal. LOL
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" :)
Thank you Architect Jennifer! I asked how does it compares to other professions. And I agree, I get sick and tired of people comparing it to Lawyers and Doctors. The problem with Real Estate as a Profession (which it is Rita: "an occupation requiring specialized training.") is exactly what Ntfeldman (welcome back I remember some great answers from you when I first joined) was saying about it being a default or a give it a try occupation.
Being a Real Estate Agent is the ultimate Get Rich Quick American Dream. Just about anyone can try and just about everyone does but only the rare few actually Get Rich Quick. Some agents work hard, long or smart and get rich the real way. Most agents just barely squeak by eventually give up. It's like the movie Pursuit of Happyness, a homeless guy becomes a millionaire. But how many other guys were working for free and didn't get the job?
I'm an Entrepreneur. My dad and grandfather were Entrepreneurs. My grandfather came over from the old country and laid bricks. My father didn't even learn English until grade school. My father built homes without any training and made more money at age 25 then most of the people in town. He expanded to motels and shopping malls and all sorts of things he really didn't know anything about but was successful (as an overall whole). There were times he sunk money into a looser or the market conditions changed and all his money was tied up but in the end, he was still worth millions.
I guess the other professions that shares similar traits are being an athlete, singer or actor. There is no "barrier" (such as enough money to go to college for 8 years) to becoming a professional athlete or superstar, anyone can try. But specialized training is required and natural skill and determination will ultimately decide if you can make it.
I have lots of other thoughts on the bigger implications of things said, but I hold off for now.
I'd love to compile a list of added requirements. But I think the reality behind performing this job successfully is adequate to eliminate most of those who should have failed their classes/tests. Call it the School of Hard Knocks. It takes an amazing person to be successful in the long term.
As a Realtor, I agree that the qualifications for becoming an agent are a bit low. On the otherhand, there are lots of ways you as a consumer can protect yourself from a bad agent.
The first thing I would ask for is a resume from the prospective agent. You are about to hire that person and it makes sense that you would interview to find the right person. Review the resume as if you were about to hire that person in your own company. Look for the right experience and education. Even a new agent can have great experience if they've previously had a career in another field where similar skills are required. For example, if a new agent is proficient in Microsoft Excel, you can presume that they are pretty good with numbers and figures. (Oh, also look for typos in the resume... typos indicate poor attention to detail... something that would be extremely bad in a prospective agent).
When you interview, definitely interview a number of agents. You can learn skills and tactics from one that will help you interview the next, and so on. For example, I would ask them to describe in detail how they negotiate the sale on your behalf. A good agent will tell you that they will review the market for the latest information, and complete a "market analysis" right at the time of the negotiation. This will be the same process a listing agent would do when they want to list a house, and it should include an asking price, a proposed selling price and also a bottom line price.
If you are the buyer, the same market analysis can show you the most you should spend for the house, the most reasonable price you should buy it at, and a low-ball price that would be a great deal.
If the agent you hire doesn't describe such a process, ask them how they will get you the best price during the negotiation. Ask them how you will know you've gotten the best price. A good agent will always revert to the market analysis since it is the best way of comparing property values at any one time.
Real Estate is not really a profession, but we use that term interchangably with other terms to denote someone who is serious about their work and capable at it.
You need someone who is detail oriented, someone who is a skilled negotiator. Look for someone who has owned property and has bought and sold personally a number of times. Look for someone who has strong opinions about things... and see if you share those opinions. Ask tough questions and see how well the prospective agent understands those questions and can answer them clearly.
Look for someone who listens to you and who asks a lot of questions. They're the ones who are best able to meet your needs and wants.
Finally, being a real estate agent is not difficult per se. Using MLS is easy. Opening lock boxes and showing property is not tough. Reading listing sheets is not difficult. Even the math is not complicated at all. However, what makes the real estate practitioner excellent is project management skills. You want someone who is all over the details. Someone who keeps in touch with you, as well as every party to the transaction.
Deals generally fall apart because someone slipped up on a detail. A good agent is prepared for the slipups and has a backup plan in mind. A good agent keeps in touch with you either by phone or email. Oh, and a good agent is also a Realtor who ascribes to a set of ethical standards that afford you some measure of protection and comfort.
Good luck with your home sale. The photo is lovely.
It `s not that easy in AZ
We take a 90 hour class and we need continued education credit hours for our renewal every four years.
That is the entry level.
I agree with Diane... I think.
Again the used car salesmen? I don't see it.
I guess the used car salesmen who sells Real estate part time.
Definitely there is a level of Realtors in business that are giving the rest of the Realtors a bad name.
Yes stricter overall licensing requirements would be a good thing for our image.
Let`s remember the minimum service law, to help keep our discount friends honest.
That would make a big difference.
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.
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?
Other states though, are very hard to get licensed in. NC and VA come to mind. As a minimum I believe the number of hours should be changed. I think they are being doubled in NYS from 45 to 90, but it's still too easy.
As for the answer below mine, IMO no one is forcing and no one CAN force anyone to spend more than they want to or they can afford. Heck I can't even force someone to spend as much as they tell me they can, no matter how hard I try!! :) (That's real estate agent sarcasm, in case anyone in the public thinks I'm serious).