Proposed Bill Would Raise Standards for Real Estate Agents

There’s enough to worry about in the Florida real estate market. Buyers and sellers have plenty to digest before determining what sort of home loan is best. It would be nice not to have to concern yourself with the quality of your real estate agent, as well, wouldn’t it?

This relief may soon be forthcoming. A real estate industry-sponsored bill requires new agents to complete three classes before getting their state-issued license.

Under current law, becoming a real estate agent requires the completion of a Real Estate Principles class at a community college or career college, and then passing the state’s real estate exam. That requires less than a year - and could even be just a matter of months. Is there really any wonder why commissions may come down as people grow more distrustful?

The new agent then gets a conditional license and is required to take two more classes within 18 months to maintain the license.

“There has been quite an influx of new agents into the marketplace over the past several years which has eroded the quality of service, the level of services and the professionalism in the industry,” said Alex Creel, chief lobbyist for California Association of Realtors, which is sponsoring the legislation, Assembly Bill 2429.

The bill would require would-be agents to complete three classes - one of them in real estate law - before taking the test and getting the license.

“We want to ensure that people receiving their real estate license have the training and education before they start working,” said Andrew Langley, legislative assistant to Gloria Negrete McLeod, a Chino Democrat who authored the bill. “They should have the education under their belt before they are doing deals.”

There are almost 500,000 licensed real estate agents and brokers in California, up from 297,359 in June of 1998.

“I’ve always been for raising the bar for entry into the industry,” said Mike Lyon, owner of Lyon Real Estate, the largest locally based firms with 980 agents. One of the first things his new agents do is go through extensive training beyond the license requirement.

Matthew Stewart, president of Stewart Ventures Real Estate in Rocklin, agrees and adds that the increased requirements would protect agents.

“There are a lot of people getting into it that are not prepared and who don’t have the education to provide the necessary service to their customers,” said Stewart, who completed the three required classes before he took the state test, so he got a four-year license rather than the conditional 18-month license.

New York, Washington, Illinois, Florida and several other states have real estate agent licensing requirements similar to California’s, said Tom Poole, spokesman for the California Department of Real Estate. Some states have registration requirements for real estate agents. Some states have no requirements at all.

“There may be a question of fairness. All these people have their licenses, and now new rules would make it harder for others to get theirs,” Poole said, adding that he doesn’t know of any opposition.

Usually, the number of real estate agents declines when the housing market slows. Most new agents will find few deals, and some likely get into something else, letting their licenses lapse. It has happened before. For example, in January of 1995, there were 330,000 licensees in California, a number that decreased by 10 percent over the next four years.

The proposed law has a variety of implementation and sunset dates so that, if enacted, it would affect only those people who would apply for a real estate license after January 2007. If you choose to hire an agent for your Florida home loan, this can only be a comforting fact to consider for the future.