I definitely agree with most of what you have to say regarding solutions.  Something definitely needs to be done.  Unfortunately, I could very easily see nothing being done...

I too am an advocate for tougher licensing requirements.  We have to start somewhere.  The brokerages rely on market share.  Market share means that you hire anyone and everyone who might bring in a deal or two in the year. 

We need better quality control but it MUST start at the Pre-Licensing courses of instruction.

I would be in favor of making it harder to get your license as well. When 6% of the Realtors are doing 94% of the business, it makes sense that the majority of the agents practicing are not properly educated enough to represent a client well. It's no wonder our industry is not looked upon that favorably when the ease at which you can get your license is a piece of cake. 

Your on my soap box Jim.  Our licensing requirements are a joke in the state of AZ.  Many of the real estate schools across the country teach the students the answers to the questions. Then you sit in front of a computer and read through the multiple choice questions, see the answer to the question and you have another one correct.  Unless your a complete idiot you're going to pass the exam.

One of the problems is that all of the revenue from RE licensing goes to the states general fund as it does here in AZ.  Our politicians just want the revenue and are not that concerned about protecting the public.

In some states you can get your RE license with out a high school diploma!  So we license our RE agents so we can protect the public - NOT!

A good start to curing this problem would be to mirror the requirements set by the state of Texas.  Over the last 5 years they have softened a bit but they still have the highest standards both Salespeople and Brokers in all 50 states for RE licensing requirements.

Jeff and Jane Daley
Keller Williams Realty - Scottsdale 480-595-6412
http://www.luxuryvalleyhomes.com/
Jeff@LuxuryValleyHomes.com
Scottsdale Luxury Real Estate

Jim,

I take certain exception to your assertion that Inexperience leads to temptation.  I am sure if I research long enough, I can find numerous examples at ALL levels of income, where temptation ruled the day.  Tyco, Enron, and Worldcomm might be a good place to start.

Bottom line is a buyer or seller needs to be comfortable that the agent they have chosen to do business with is competent and trustworthy.  These traits are not exclusive to those with experience.  I am sure that there are thousands of agents out there with 3-4-5 years experience who are not as capable as some with only 1-2 years.  The market is changing.  Business does not just drop into peoples laps now like it did 3 years ago.  Finding a Realtor with the incentive and expectation that they will have to work hard is half the battle.  Sometimes those who are most hungry are the best choice for service.  They have not had time to get complacent.

Every industry has fome slackers - there's always that 10% right.

I do agree that there is too many agents but I must disagree that new agents have not had enough transactional sides to get experience.  I have been licensed since 2005 and have done close to 30 transactions.  Not too shabby considering our boom was 2004.  

Renee, congratulations on 30 sides. ALL inexperienced agents won't be bad. I was one once too. It can be a factor. I also mentioned undercapitalization, resources etc.

William, I have spent the last 2 years cleaning contracts to protect my license. Even if fraud were not the case, I am tired of it. Like I said to Renee above, it is a factor to be concerned about. I would also have to say that experience can lead to fraud also.

Jeff and Jane, on another forum an agent asked how to fill out a purchase contract. Respondents commented it should have been addressed in school. He said his state only had 25 hours. Contracts were covered as follows. "Here it is, you can figure out what to put in the blanks". The commissioner of that state should go to jail.

Kaushik, Lenn and Bill, I see we are basically on the same page. Unfortunately, Kaushik is probably right.

To all of you, thank you for your comments. Each of you has given thought to this matter and I appreciate it.

I would like to say I disagree with you but I can't! In the past 6 months alone, I've seen more cases of fraud by agents and owners than I had in the previous 3 years. Sad part, some of this fraud I've seen has been by agents that have been in the business 10 years or more.

Of course there are "too many agents" in the sense that lots of people have gotten into RE because the market was so good. The people who don't want to work will get out just as quickly. The problem is that they MAY do an incompetent job on the sales they do before they get out- and so hurt the reputation of agents in general. I agree with tougher licensing standards, and I think there should be some kind of competency test to renew- not just take the hours and pay your money. I don't have a problem with part-timers keeping their license, even if they aren't active, but EVERYONE should have to prove that they know what to do and how to do it.

Todd and Leslie, After submitting this blog I thought it didn't go far enough. Too many agents, inexperienced agent all chasing the clients in a declining market weakens us all. Unfortunately, it isn't just the new and inexperienced agents who cause problems. As the pie gets cut into smaller pieces, agents of all levels of experience face temptation.

I am 100% in favor of raising the bar for entry into this field, and I want to see brokers held accountable for training and supervising the newer and less active agents. Just letting any warm body hang a license is gross malpractice in my book. As an agent I know who sits on the commissioner's advisory panel for licensing says, "we don't even have a requirement that a new agent be able to fog a mirror."

As a newer agent I have to agree, some.  I think raising the bar is fine.  But, I have been seeing some pretty crazy and bad things by some experienced people.  

Jim-Great post!  I am amazed how few agents in our board got out of the business.  I don't know if my major concern would be with the new agents but some of the experienced agents who started real estate in the good times.  I see so many seasoned agents either doing nothing and complaining or the seasoned agent who is so desperate for money they will close a transaction at any cost.  

As far as licensure, not sure that is the answer.  Our associates are extremely well trained, even the newbies too! It's all about company standards and individual standards.   

Hi Midori, Thanks for your comment. I always value your opinions.

As I modified my post in my own comments above, we totally agree.

Regarding licensure, Why should a brand new agent have the same license I do? AZ is considering a 2 year first or provisional license, 4 year renewal. I would support that, but some changes have to be made for getting the deadwood off the rolls also.

Training is one of my complaints with brokers. If you won't train and supervise your agents, get a job! The old paradigm of "there's your desk and phone, sell something" won't get it.

Supervision is another one. I tried to reach an agent re an offer. She wouldn't return my calls so I called her broker. He said "I can't get her to call ME back" Shame on him. If it was me I would have sent her license back to the commissioner.