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California to eliminate conditional real estate salesperson license.

It may not be common knowledge, but historically, all you needed to do in order to take the real estate salespersons exam was complete 1 class. If you then passed the exam, you would be issued a "conditional" license by the state which allowed you to practice real estate so long as you completed two additional classes within 18 months of getting your license. (You can reveiw the new law here ).

It is also a reality that most real estate agents (something over 80%), leave the business within 18 months. Some number of those are clearly licensees who did not complete the additional educational requirements.

This move is supported by the California Association of Realtors. In short, it will require all applicants after October 1, 2007 to complete all three courses before they can sit for the real estate salespersons exam.

Is this a good thing?

Yes. It is.

Many in the industry have complained that it is far too easy for one to obtain the real estate salespersons license. The failure rate among those who get their license is huge. At least 80% of agents fail within 18 months of getting their license.

The hope is that by increasing the requirements before the license can be obtained, applicants will be made more aware of the realities of the business of real estate and that those who are not fully committed will not wish to complete the added work before sitting for the license exam.

Frankly, I think it is a good idea. Anything that requires more of applicants is a good thing. However, none of the courses required for taking the exam are really going to make a potential applicant aware of the realities of the real estate business. The exam itself seems ignorant of the business of real estate itself at times.

For my part, I can only hope that this just the beginning of a trend that will allow only the most competent, knowledgable and dedicted to obtain a license as a california real estate salesperson.

Posted by Robert Whitelaw, Broker, CEO, Realtor®, ePro on 10/10/2006 05:18 AM

Comments (29)

california, real estate license, conditional

Originally posted at: "The Rebel Broker" Real Estate Blog: California to eliminate conditional real estate salesperson license.

This post has been included in California Information

29 Comments on California to eliminate conditional real estate salesperson license.

OCT

2006

Robert,

It has been my experience that those individuals who get into the Real Estate or Mortgage Business are driven by self-interest and greed...a desire to want to make a quick buck!

I agree with you in that it is a good move to increase the requirements necessary to sit for the exam. But people will not be exposed to the harsh realities of the business until:

They either fail the exam
They don't get any business for the first couple of months or more

The actual preparation classes are too easy. You can enroll in an online course and take the exams for your certificate of completion. And did you know that in a lot of cases these exams are open book. So what are applicants really doing? "Cheating" to pass their principles course and taking a 1-night crash course before the exam. There will always be someone who is looking for a short-cut to being a licensed Real Estate Agent. And this goes back to the motivating factors of self-interest and greed.

It will always be left up to the consumer to do his research and find a well qualified, knowledgeable, ethical and trustworthy Real Estate Agent or Mortgage Professional.

Best,

Ricardo Bueno

Mortgage Consultant

Everything that you do should contribute to a strategy! -- RB

It would be nice if the real estate schools taught more business and less "how to pass the test", but most of the schools are playing to the crowd.

I think it is great! I think the more education the better!

I would be nice to hear something like that happening in Florida. I was lucky enough to be working for a REALTOR® when I took the class and the exam. Everyone I spoke to said "the class has nothing to do with the practice of real estate." They were right. However, when I did my continuing ed course in my initial post licensing period, that course had some meat. It spoke much more to notion of "how to do this as a job" with subjects like contracts, listing presentations, etc.

As one of my instructors said in a recent GRI class that I took. It's funny how we want to be viewed as a "profession" like doctors and lawyers but considering that their education requirements are measured in years and ours in hours, is it a realistic expectation?

Wow. In Colorado there is no such thing as a "sales person" (brokers only) and I'm glad. The process to become a broker here is quite difficult- yet we still have too many hoo-ha's passing the tests.

In Texas, you must have 210 classroom hours of core classes. Then, for the first 4 years, you must take 30 additional hours to renew your license. Then after 4 years, you need 15 hours every 2 years... we have the toughest requirements across the country, and no matter what they require, you're still going to get the idiots. Some people know how to study the book, but it doesn't mean they know how to put the things in the book to everyday situations.

Within the first 18 months, 80% quit. Within the next 6 months, 60% of the remaining 20% quit. That means, only 8% stay in real estate after 2 years... it does't matter how tough the classes are and how much you educate people. 92% still won't get it!

This won't be the popular comment but I think the new law that eliminates the conditional license is anti-competitive. Licensing California is a joke; the DRE enforces very few infractions.

The growth in licensees has lead to lower costs to the consumer for loans and real estate brokerage services. Creating more barriers to entry reduces the competition and will drive up the cost of loan and real estate brokerage to the consumer.

"Gov't is the problem, not the solution"- Ronald W. Reagan

It honestly sounds more like a ploy by the State of California to collect more revenues they would typically lose by licensess quiting prior to payment of the additional courses. I think even with the courses in place you will have nearly the same number of realtors and the same number that will bow out just due to their inablility to succeed!

I believe California should take the next step and eliminate the Salesperson license as well. I believe there should only be the Broker level of license.

From a purely consumer point of view, requireing more education of licensees makes good sense. Hopefully, if more education takes place before the license is granted, the public will be better protected from unintentional errors and ommissions by new licensees.

hard to believe that was allowed.

NC legislature passed all broker law last year.

Isn't CA one of the states that has very few (if any) additional requirements to go from a sales to a brokers license?

In AZ, it's 90 classroom hours to get a sales license. No high school required. Comapre that to getting a license to stick on fake fingernails--600 classroom hours and 2 years of high school. That is absurd.

For more on the ease of getting a license, see this...

i really agree with rich's comment. when i was working as a realtor, it felt some daunting to actually work with clients! i had no clue what to do even though the state said since i passed the test i am a "real estate professional." there are so many factors that can make or break a deal, i wish there were more coverage on how hard being a realtor actually is, instead of painting this rosy picture that it's super easy to be a realtor. (yes, being a realtor is easy, actually making money out of it is hard!)

Education is never a bad thing great blog...............

Don't forget. In the past you needed 2 yrs experiance or pass the bar to become a Broker. The law will change for Lawyers also. They can still become a Broker, they will not be able to hire any realestate agents to work under them until they have realestate experiance.

What about this? Is this also a good idea and why?

This is a good thing.

The real estate exam qualifications should also be more stringent.

An apprenticeship program, as recommended by David Eiglash is the proper training for a Realtor. I think the states' licensing departments fall short.

Make it MUCH harder to be a full licensee or repeal licensing!

I just wanted to DITTO Donna Harris. In TX it's not really that easy to get a license, but we still see a ton of flakes.

I think apprenticeship may help but look at the appraisal industry.

I can understand that. We have moved from having a salesperson license to only broker. But you have more training to do within a 3 year period and I see this a make or break agents. Good Luck

it's a good thing....but 2 comments that stood out the most.

Rich Kruse said they should teach more about business and less about passing the test. This is an awesome answer...because it's the same with some of the different tests in different states for loan officers.

the other.... Brian and Mark make good points and even Brians 2nd comment....yes, make it harder. I always said.... if they would make the mortgage tests like a bar exam or your series 7 or 11 tests..... there would be less loan officers....best business practices.... more responsible people in the business.....

OCT

2006

Way to Go California!

Wow, I wonder if Georgia will be the next to do this?

Roswell Real Estate

What about Florida?

Jay and Linnea Hanley

A conditional license. It seems like such a good idea...just complete this in 18 months...yeah right! How many people didn't do it?

OCT

2006

I think that it is a great idea. I was reading another blog on "Phantom Agents" and the lack of resresentation that is often out there for consumers. I think that more regulation could help that. I am actually on conditional license but I have found that what is common sense for me is uncommon sense for many agents! I found that it was so easy to get a license that I felt really lost when I first got started, the license process did not prepare me at all and that scared me quite a bit. Im all for it!

DEC

2006

Let's see if you raise the bar to high then it definatley would be anti-competitive. Less agents would mean higher commisions charged to the consumer. The bar should be attainable by all. But now in my forth year definately if there was a special class of broker who passed a stringent test to guarantee he or she knew how to further train new agents in ethics, fudiciary repsonsibilities, the transactions etc. Then an apprentice program under those brokers only.

Otherwise any apprenticeships you would just find some of the slime brokers under paying new "apprentice agents". Of course only the strong would survive.

I have to chime in here and dispute the last post about "The bar should be attainable by all."

The whole point of having a "bar" at all is to prevent some from reaching the goal. It is an obstacle. One that some will be able to overcome and others will not.

Not everyone is cut out to be a real estate agent. Frankly, a large number of the agents who are in the business now are not cut out to be real estate agents.

Expecting a high competency in understanding all the elements of a real estate transaction and ways to approach them is not a bad thing.

I also disagree that by lowering the number of agents, you would increase commissions. Frankly, this makes little sense. There is no way the number of agents could ever be driven so low that commissions would rise.

Also, someone posted what they thought were the main reasons someone gets into this business. He cited, "self-interest and greed...a desire to want to make a quick buck!". In all honesty, I cannot help thinking that comments like that tell us more about the person who says it, than the people it is supposedly about.

I can say in all honesty that I did not get into this business for those reasons. In fact, if money was my main motivator, I would never have left some previous positions in the corporate world at all.

Can we get rid of all the dead weight with higher licensing requirements? No. I am sure we have all met complete morons that have managed to get through law or medical school. If those "bars" cannot hold back all the morons, I don't expect that our industry will manage any better.

But anything is better than nothing and for right now, we have nearly nothing standing between just about anyone and a real estate salespersons license in California.

I agree with you Robert. I think that it does need to be tough. The public perspective seems to be that Realtors are made of money. This makes a lot of people want to get a license for the wrong reasons.

When they are in it for the paycheck, things like consumer protection, consumers best interest and extended learning are not important. None of those things increase a paycheck.

I had a conversation with an agent not too long ago who had a client that liked my listing. When I asked if they were going to have a second showing or write an offer, her response was that she noticed that we were offering 2.5% and she had found some others that were similar and offering 3%. I asked, "But what does your client think about the property?" She responded that if we were offering 3% THEY would probably write an offer.

I cant say that I know whether or not she was is on a conditional license, but clearly she is not a realtor that is in it to help other people find the right or best home for them. She seems to be looking to find a home that will work and get her the most commission. When I am working with clients, it is their needs that are my concern, the commission is not a consideration that I make. It is what it is.

I really think that by making it a bit more difficult we will weed out some of that type of agent and really be doing our consumers a service.

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