The “license hanging wall” brokerage business is re-surging in today’s less than optimal economy. I am sure there are one or more such brokerages operating in your market. For a monthly fee of $25 or $50, those nice people that obtained their real estate license in the recent boom housing market get to keep their license active while they do whatever they have to do to survive the downturn, and maybe sell a house once in a while. The brokerage takes the monthly fee, and since there is almost zero overhead in maintaining the license, the money goes directly to the bottom line. The sharp operator can hang almost limitless numbers of licenses, and if one of the licensees actually sells something, there are additional processing fees to cover the cost of that specific overhead. It is, very simply, a money machine.

My concern here is not aimed at a brokerage’s license hanging business model, or the nice people that hang them on the wall, but it is aimed at an industry philosophy that caters to the mediocre and tolerates the incompetent. Now, before someone gets their nose out of joint, or puts their toes out there where I am liable to step on them, please understand where I am coming from. I have believed for the 30 years I have been practicing real estate brokerage that you deserved to be paid only if you gave value. It is no wonder that consumers are having difficulty paying the “professional” service fee, because consumers are questioning the value proposition offered by the brokerage industry. There is nothing professional about hanging a license on a wall waiting for easy times. (Please take a moment, leap to your Webster’s and determine the difference between “acting in a professional manner” and being a “professional”.)

It wasn’t too long ago that the National Association of Realtors was proudly crowing that NAR was the world’s largest trade association at 1.3 million members. I cannot for the life of me understand why an organization would boast about being really big unless there was a benefit to its members, but, never-the-less, there we were at 1.3 million; averaging all of 6 closings per year (that number not being mentioned in the press releases). Lately, that 1.3 million has dropped a bit, perhaps something about a difficult economy. A quick look at post WW II demographics would indicate that today's Realtor membership should be something like 850,000 if a consistent relationship between the United States population and Realtor membership were maintained. The economic rule here is – more of anything lessens the worth of the thing!

So I say-Now is our chance!

If there was ever a time to raise the bar of both licensing and NAR membership, it is now, before the economy recovers and hundreds of thousands of opportunists rush to grab a real estate license. The NAR should lobby for every state to increase the difficulty and cost of obtaining a license, while, at the same time, raise the standards of membership and make ethics complaints easier to file, and penalties for violation truly painful. This is an ideal time to improve the quality and competency of the NAR’s membership, while at the same time demonstrating to the consuming public that we are worth what we charge. I firmly believe that residential real estate brokerage will be around for some time to come; however, the practitioners are going to have to be demonstrably good at what they do.

Larry D. McGee Broker The Berkshire Group, Realtors 3801 E. Florida Avenue Suite 400 Denver, Colorado, 80210 US	Work: 303-513-1436 Fax: 303-953-5390 larry@tbgdenver.com http://brokerisms.theberkshiregroup.com
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