A Realtor trade group in California is pushing for heightened licensing requirements for all real estate agents and brokers in the state to try to raise the bar on agent experience and education.
The California Association of Realtors has sponsored legislation that would require two years of active experience as a real estate salesperson as a prerequisite to obtaining a broker’s license. Currently, applicants for a broker license can receive a license without previous work experience in real estate. A separate bill would require that all applicants for a real estate sales license first complete three courses prior to receiving a license – existing law provides that licenses can be issued after applicants complete one class, with subsequent courses completed within 18 months.
“If you talk to any groups of Realtors out there you will get feedback that tells you they are concerned about the level of expertise on the other side of the transaction,” said Stan Wieg, a lobbyist for the California Association of Realtors. “We’re trying to raise the quality of education and experience.”
Vince Malta, California Association of Realtors president, said, “a four-year degree in chemistry does not make you qualified to be a real estate agent or broker. We are looking for experience related to the industry. We don’t think this is asking too much.”
Malta noted that someone who cuts hair in the state of California requires more training than real estate agents in the state. “(In) California we like to hold our agents to a higher standard, and that’s what this really reflects.” The intent, he added, is not to limit the number of people in the industry but to raise their qualifications.
The California Department of Real Estate reported that the total number of real estate licensees in the state reached 481,319 in January, with about 72.5 percent licensed as salespersons and the remainder licensed as brokers. The total number of licensees represents a 55 percent gain from January 2001, when the department reported 309,473 licensees. In that month, 65.3 percent of all licensees were salespeople and 34.7 percent were brokers.
A department spokesperson said the agency doesn’t have a position on the new proposed legislation.
Wieg said that as the total number of licensees in the state has grown, so has membership in the state’s Realtor trade group, which has about 180,000 members. All Realtors are licensees, but not all licensees are members of the Realtor trade group.
“It’s really a consumer protection issue from our standpoint,” Wieg said of the legislative efforts to heighten licensing requirements. “There are lots of folks out there really flooding the market who are either inexperienced supervisors or (have) only partially completed education for salespeople. Our members have become concerned that the quality of practice out there is not what it should be. It’s not like we’re going to create a shortage.”
Last year, the Legislature passed an association-sponsored bill that requires additional continuing education for real estate licensees. The bill provided that licensees, after July 1, 2007, must complete a three-hour course in risk management as a part of the state’s continuing education requirements to renew a real estate salesperson license. That course must include “principals, practices and procedures calculated to avoid errors and omissions in the practice of real estate licensed activities,” according to the bill text.
Wieg said that legislation, too, was a part of the association’s effort to raise the bar for real estate professionals practicing in the state. Wieg said he is not sure how California licensing requirements compare to other states. “This is really driven more internally by looking at our law and seeing what deficiency is in our law,” he said.
The number of Realtors and real estate licensees has historically grown during a strong seller’s market, which is marked by an increase in the number of sales and the price of homes, and decreases as sales slow.
Membership in the California association was at 181,664 in February, a gain of 17.4 percent compared to February 2005, but was down about 3.5 percent from January 2006 to February 2006.
The National Association of Realtors has seen some major swings in membership numbers at different stages of real estate market cycles. The national trade group now has about 1.2 million members, and saw its membership grow about 68 percent from 1997 to 2006. But membership dropped about 15 percent during a slow housing market from 1989-97, for example, and slipped about 23 percent from 1981-83.
Assembly Bill 2429, introduced by Assemblywoman Barbara Matthews, D-Stockton, on Feb. 23, establishes new pre-licensing requirements as of Dec. 31, 2009. Existing law provides for two ways to qualify for a sales license, the association noted in a legislative announcement.
“The first option requires an applicant to take three real estate classes and then pass the salesperson exam, and after a criminal background check receive a four-year license,” according to the announcement. “In the second option, an applicant takes only one class and then takes the exam. Should the applicant pass, they may obtain a ‘conditional’ license and finish the rest of the required course work during the next 18 months.” The announcement refers to this option as a “quickie” license, stating that it “has become the rule rather than the exception, allowing many licensees to represent clients without the required completed coursework necessary to effectively represent their clients.”
About 85 percent of the roughly 100,000 new real estate licensees in California over the past three years have opted for this conditional license, the trade group also noted.
Assembly Bill 1963, introduced by state Assemblyman Tim Leslie, R-Roseville, provides that the state cannot grant a real estate broker’s license “unless that person has held a real estate salesperson’s license for at least two years and qualified for renewal real estate salesperson status within the five-year period immediately prior to the date of … application for the broker’s license, and during that time was actively engaged in the business of a real estate salesperson.
Existing law provides that an applicant who has at least the equivalent of two years’ general real estate experience or graduated from a four-year college or university course, files a written petition with the state setting forth his or her qualifications and experience and receives approval, and passes an examination and satisfies other requirements can receive a broker’s license.
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