The Real Estate Agent: A Helping Hand or a Fast Buck Seeker?

The Real Estate Agent: A Helping Hand or a Fast Buck Seeker?
Educational requirements for obtaining a real estate license might be too lax, but on the job training is also a key to getting the service you expect.

By Joyce Megginson Kircher
October 31, 2005

You’re going to buy or sell a house, and you don’t know whether or not to go through a real estate agent. Perhaps this discussion will help you decide.

“It’s probably the biggest investment you’ll make in your life, and yet you may not be in safe hands when dealing with a real estate agent,” warns Anthony Marguleas, owner-operator of Amalfi Estates, Los Angeles, whose book, Real Estate Secrets –What Your Agent Is Afraid To Tell You (Gabriel Publications), will be on the market in December or January.

“Everybody and his actress sister get into the real estate business in California because it’s so easy to get a license,” says Marguleas. “Only 48 hours of formal education is required. It ought to be 500. Even a plumber has to go to school for 2,080 hours; a CPA, 5,980.”

As in all other states, applicants must pass a state test to be licensed, but Marguleas says that “cram courses practically give the answers to the state test,” thereby enabling too many incompetent, unqualified applicants to acquire a license.

California is low on the education scale in real estate, with Texas leading the pack in formal education required. Next year, 210 pre-license hours will be required in Texas, with 60 more required by the end of the first license year. This compared to Vermont, requiring no formal education – only an association with a broker; or Alaska, requiring 20 classroom hours for a license; or Massachusetts, 24 hours.

Most real estate figures interviewed for this report think that the formal education required for a license is adequate and that the real key to real estate education lies with a knowledgeable supervising broker. “The business of government is to set minimal standards of competence,” points out Lori Rodgers, president of Bert Rodgers Schools of Real Estate, Sarasota, FL’s biggest real estate educator, who has been in business since 1958. Florida requires 63 pre-license hours and 45 post-license hours within the first 18-24 months of licensure, depending on the licensing cycle. Rodgers thinks the curriculum is sufficient for residential, but not commercial.

Florida has 300,000 real estate agents. The pass rate for first-time state test–takers is 40 percent, and that percentage decreases with each successive try, says Rodgers, who adds that her students have a first-time pass rate of 85-95 percent.

Pat Haggins, a salesman with Century 21 in Balesteri, Buffalo, agrees that a helpful, competent supervising broker is the secret to success.

“But it only takes one year of real estate experience to get a broker’s license in Florida,” says Jean Starkey, owner-operator of ERA Aladdin Real Estate of Merritt Island, FL. “It’s babies teaching babies. After only one year, an agent may not even have had one sale.”

“A broker well-versed in contracts, negotiations, financing, mortgages, market analysis, pricing, ethics – the works – is the real educator,” Starkey maintains.

Continuing education is also important, stresses Donna Amos, sales manager with Coldwell Banker West Shell, in Milford, Ohio, a Cincinnati suburb, whose firm has 800 agents in 14 offices in the tri-state area of Ohio, Indiana and Kentucky.

Ohio requires 120 classroom hours (Indiana, 60; Kentucky, 96), and Amos says her firm requires an intensive in-house two-week course covering contracts, negotiation, client servicing, presentation skills, and other subjects after licensing. Though Amos feels that new agents’ biggest fault is in business management skills, all interviewees for this study agree that ever-continuing education in the field is mandatory for competent real estate practice.

But what Marguleas sees as most lacking in real estate practice is a sense of ethics. “Some agents don’t even present offers – sometimes, better offers – from other companies.” Says Lori Rodgers: “If you’re not honest and ethical by age 18, chances are you’re not going to learn to be.”

So if you’re buying or selling, how can you pick an honest, qualified real estate agent? If selling, ask the agent how he or she would feel about another firm selling the listing. If you get anything but an enthusiastic response, thumbs down.

Ask about contract details, financing and mortgages, confidentiality, and fiduciary responsibility. You’ll soon find out if an agent is qualified and ethical, and you just might not have to go the “for sale by owner” route. On average, sellers net more when selling through an agent. The National Association of Realtors reports that the typical agent-assisted home sale is $189,000, while the median for-sale-by-owner sales price is $163,800. So if you’re buying, you just might do better joining the trend the FSBO way.

Joyce Megginson Kircher, MBA, is a licensed real estate broker and instructor in Florida, as well as a freelance writer on real estate and other subjects.