Real estate is an important part of the American economy but a recent report from the National Association of Realtors suggests realtors need more training:
In an unusual move for a major American trade association, the million-member National Association of Realtors has commissioned and released a frank and sometimes searing assessment of top challenges facing its industry for the next several years. The critiques hit everything from the professionalism and training of agents to the commissions charged consumers, and even the association’s ?leadership.
-“The real estate industry is saddled with a large number of part-time, untrained, unethical and/or incompetent agents. This knowledge gap threatens the credibility of the industry.” Ouch!
-Low entry requirements for agents are a key problem. While other professionals often must undergo extensive education and training for thousands of hours or multiple years, realty agents need only complete 70 hours on average to qualify for licenses to sell homes, with the lowest state requirement for licensing at just 13 hours. Cosmetologists, by contrast, average 372 hours of training, according to the report.
-Professional, hard-working agents across the country “increasingly understand that the ‘not-so-good’ agents are bringing the entire industry down.” Yet there “are no meaningful educational initiatives on the table to raise the national bar …”
This is a good example of maintaining professional standards, a key activity of many business associations. (For an award-winning sociological read on trade associations and a book for which I did a small amount of research work, see Solidarity in Strategy: Making Business Meaningful in American Trade Associations.) Keeping track of the actions of thousands of members is a difficult task. The NAR has the ability to bestow the name REALTOR®. Upping the standards with harder tests and stricter requirements has been done by lots of groups in order to improve their status.
But, this might also have some negative consequences:
1. Might it encourage more people to bypass realtors all together? This is easier than ever with the Internet.
2. If I remember correctly, the average age of realtors has increased in recent years. Might this simply increase that?
3. Might this issue be solved in other ways like if realtors worked within agencies that stressed standards or through mentoring programs that offer benefits for both parties?
4. Do realtors want more regulatory oversight like other groups – such as cosmetologists? This may help up their status but could lead to more hoops to jump through.