This isn't the first time I've written about this, but recently, after reading a post by Lenn Harley, called HOW TO SUCCEED IN REAL ESTATE, GET REINTERMEDIATED. It got me thinking.
As many of you may know, I am a car guy. So, I will use a car reference. As mentioned in the comments I left in Lenn's post:
As an example, let me offer up auto mechanics. There is no state licensing requirement. There is, however, a trade organization that rates their skills. The ASE.
Now, if a mechanic makes a mistake on a fuel system or a brake system, accidents can happen, people can die (I know, it is dramatic, but it happens all of the time). There is no state license to rebuild a brake system, or work on a car. Sure, the systems are complicated... but they aren't impossible. Heck, some owners work on their own cars.
The ASE (National Institute of Automotive Service Excellence) test mechanics. The tests are not easy. It takes training. It takes continuing education. There are dealer trained mechanics that are good... and they can't pass the ASE. Of course, there are some people that have passed the ASE that can't solve a particular problem, they aren't wizards.
And, while real estate transactions are certainly complicated beasts, death is not a likely outcome of a mistake... but, if one makes a mistake with the anti-lock braking system of a car... well, brake failure is not a good thing.
Do I think that real estate professional should be less qualified?
Absolutely not. On the contrary, I think we need MORE qualification. However, the states seem to be unwilling or unable to make that happen. So, I think we need to make their irrelevance complete. Here's why;
- Consumers often assume that qualifying for a real estate licenses gives a level of competence to properly conduct a transaction.
- Since being a licensee entails having that competence, all licensees must be able to properly conduct a transaction.
As a licensee, I know that there are others with licenses that are just as valid as mine that are just not competent. In some cases, they don't know what they are doing. In other cases, they don't care. In a few cases, they know and care, but are doing it wrong on purpose... for their personal gain.
So, if there isn't a license, like there isn't a license to work on cars, there would come a responsibility on the part of the consumer to actually look for a qualified agent. Sure, there would be cheesy, fly by night brokerages that would pop up and not be worth the paper in their fax machines... but there are now.
So, what would a consumer do?
Look to the organization that already says it is a collection of the best agents. The NAR. Of course, there would have to be a major change of mindset at the NAR for that to happen.
- Membership would need to require more than 4 hours and a checkbook.
- They would need to focus on vetting the quality of agents, rather than just going for power through size.
- The NAR would have to let go of the local MLSs.
Right now, there are about 1.3 million REALTOR(R) members. If the NAR required additional education and performance standards, there would be fewer. That would mean less money and less power for the leadership (both elected and staff, as well as lobbyists). It would be exclusionary. Of course, that exclusion would be based solely on performance and ability.
I think this would solve a couple of problems. Think of the blow to the DoJ and their lawsuit if the NAR got out of the MLS business and turned these MLSs that are still operated by local associations over to non-connected concerns. And, if the NAR membership shrank, and didn't include the VAST majority of real estate practitioners, but only the top 25%, they would certainly have a hard time coming after them in a trust-busting maneuver.
Bottom line...
I think that real estate professionals need to be MORE qualified... and that qualification should be voluntary. Instead of the alphabet soup that consumers don't care about behind our name, the tag REALTOR(R) should mean that we are qualified and capable... the best. Just like knowing that the ASE patches on the sleeve of your auto tech means that he or she is fully capable of working on your ride.
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I'd love to hear from you...
I wonder if the folks at NAR have pondered this. I agree there is much that can be done to improve the image of our industry in the public eye.
Lane,
In my state of Tennessee if a broker was licensed before a certain date he or she does not have to get additional CE hours. I am one of those who are grandfathered in and do not have to get any more education. This is a hugh mistake in my opinion. I do get lots of extra CE and I am better for it. And as you say NAR does require the fours hours of ethics training(we could use a lot more of that as a industry in general). In Tennessee agents and brokers have to have 16 hours of CE every two years unless a grandfathered out broker.
Melina - For all of the whing that the NAR does about trademarks, they haven't protected REALTOR(R). They wanted it to be a brand... like Kleenex, and now it defines all licensees. It need to mean something.
Eric - There is a lot that can be done, but I don't think the NAR is as worried about the quality as they are the quantity. All they seem to do is play lip service to quality of REALTORS(R).
Jonathan - I think that the NAR should require that... not the state. And, do you mean real estate agent, or REALTOR(R)?
Mike - Same in GA. Except for ethics training every few decades...
Lane,
The view from the garage is always to an open road. Don't you think the market is gong to bring changes to bear in Realtor education?
It seems like it would. I mean, I don't even change my own oil but I do take it to a place where they guys have those ASE patches ontheir arms-for sure!
Steve
Steve - I don't think there will be meaningful changes from the NAR or from the states. Both are too entrenched in the current system. The DoJ is just looking for cash. I think that individual agents will get more education, but the trademark REALTOR(R) won't mean any more than it does now because it is entrenched in society... and the NAR won't ever tighten their standards for basic membership.
Larry - Despite what I just said to Steve, I would like to see the NAR take the lead and make the label REALTOR(R) mean educated and capable.
DeAndrea - I think that the only people that are impressed by the alphabet soup are other agents... that know what the designations mean. I have had plenty of clients say that the only important designation to them is Associate Broker.
Chuck - It's not that I think some of the classes are remedial, it's that membership in the NAR is just a check and four hours away. I think there needs to be a higher bar. I would love to have it so that consumers feel like the designation, REALTOR(R), means something.
I totally agree with your premise that Realtor should be a professionl designation, with education and training to back it up. The lowest common denominator depicts this profession. I'm not happy with that, so all I can do is educate myself and raise my own standards. Pressure from the agents and brokers might remedy this situation, but most people are quite happy to keep the status quo.
BTW, licensing for auto mechanics is different state by state. Michigan was the first to require their auto mechanics to be licensed and have a minimum of training. 8-)