Anthony Marguleas, broker and owner of high-end realty firm Amalfi Estates in Los Angeles, thinks the industry shouldn't be spitting out low-producing agents. Instead, it should be harder to become one.Marguleas researched the number of hours it takes to become a licensed real estate agent, which varies by state. In California, he says, getting a license calls for a 45-hour class. Nationwide, the requirements range from a low of 24 hours in Massachusetts to a high of 120 hours in Ohio, according to ARELLO. He says it takes 9,000 hours to become a doctor and 1,600 hours to become a cosmetologist.
"To dye someone's hair it takes 20 times more studying than to help someone sell the largest investment of their life," he says.
"Real estate agents typically get ranked right around used-car salesmen. The bar is so low to get a real estate license," says Marguleas, who operates in a high-end market in Pacific Palisades, Calif., and has been in the real estate business for 15 years. "I would love to make it as hard as it is to become a doctor or lawyer to raise the professionalism. So many people who do this are part-time and not very knowledgeable about what they're doing. It's why consumers have such a poor image of real estate agents."
How can real estate agents as a group garner more public respect when they are lead by discredited shills like David Lereah? (that was a rhetorical question) Also, I don't agree that it should be as hard to become a real estate agent as it is to become a doctor or lawyer.
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Personally, I'd rather not create a monopoly for real estate agents as we already have for doctors, lawyers, and stock brokers ... Forcing up real estate transaction costs even higher than they already are. Good agents will prosper (in any market) and bad agents soon find themselves not making enough to live on .. in any market other than a rapidly rising one as we recently experienced. And eventually, a rapidly rising markets end, and only "good agents" survive. But hey, even these bad agents served their purpose. They helped process the large number of transactions that only the otherwise licensed realtors would have been handed were licensing requirements raised. This would allow these monopolistic real estate agents to NOT process all transactions and to charge more for those they did. And when all is said and done, in the kind of market we just had, how could you really have a bad agent? Anything on the market sold (i.e., few marketing skills were needed) and with only a limited supply of properties for sale, even a pleatora of better qualified realtors wouldn't have created more houses to be sold. Of course, I am assuming that one doesn't really expect a real estate agent to be doing anything more than leading his/her buyer or seller through the sales process ... Real Estate agents aren't out there to be giving financial/investment advice ... And anyone ignorant enough to depend on a real estate agent for financing and investment decision making deserves whatever they get out of it. I wouldn't go to a real estate agent for financing or investment advice any more than I would go to a priest for marital advice. You go to these folks to get your transaction done ... That's it. And it doesn't take a Phd to properly and legally process a transaction.
ReplyDeleteA monopoly for doctors? lance, have you lost your damn mind? I am THANKFUL for the difficulty it takes for a person to obtain a medical license! May that monopoly continue.
ReplyDeletegood lord. Lance, you have to stop making statements that I agree with. It's scaring me.
ReplyDeleteoh except technically it's not a monopoly (of lawyers, doctors, etc), rather it's an oligopoly. Monopoly implies just one entity (seller).
If you think licensing is good for consumers, ask yourself: Why is a real estate firm owner proposing it?
ReplyDeleteThe answer: It's bad for consumers, but good for real estate agents, because stricter licensing reduces competition among real estate agents. It reduces competition by creating barriers to entry into the profession.
It's good old supply and demand: reduce the number of real estate agents and you increase the costs that consumers have to pay.
Lance is usually wrong, but on this issue he is right. For more on how some professions use licensing to hurt consumers, I strongly recommend reading Capitalism and Freedom by Nobel Prize-winning economist Milton Friedman.
lance and james, that was some of the most refreshing commentary I've read on this blog.
ReplyDeleteProfessional licensing should be voluntary. As a consumer, I should be free to choose between a real estate agent who has degrees in finance and law, and one who has a GED and enough credit hours at the community college to be eligible to take the state real estate license exam. As it is, I’m stuck with the latter.
Let's remember that it is the state government that requires a person to get a license to perform real estate transactions on behalf of others.
ReplyDeleteAnd it is also the government that sets the hours and criteria that one has to satisfy in order to take the licensee test.
All realtors learn in those hours is how to pass the exam.
Brokers do not need to make these kinds of demands on licensee's. Instead they could just not allow the licensee to hand their license in their brokerage.
It is a concern among realtors of level of quality service providers there happen to be in any given market. It is up to the consumer to not choose sub-standard representation.
I'm sure this isn't a very friendly place to realtors around here, but I'm going to say that there is a revolution coming in the realtor world. The current broker/agent model will likely go down in flames, data sharing will change, and other business models will change.
And soon... I hope.
Laughable. Why should we ever compare real estate agents to attorneys or doctors? RE agents are merely talking heads in a suit -- a lot like a used-car salesman. If you want to straighten up the realtor's image, then educate the public to the myriad of financial scams that realtors perpetuate on the American public on a daily basis, and enact laws that closely regulate inflated costs of lending, title insurance and fees. Furthermore, don't let realtors provide financial advice or forward looking statements on the housing market. Don't let them recommend or work in cahoots with a mortgage broker. Don't let them recommend title insurance or receive kickbacks from title insurance houses or mortgage brokers. Separate and isolate the housing appraisal industry from the reaches of the real estate agent and mortgage broker. And finally, open the MLS to everyone. If we remove all the scams that the realtor plays on the American homeowner, and consequentially reduce their take from our pockets, we won't be seeing so many in the field. Ipso facto.
ReplyDelete"To dye someone's hair it takes 20 times more studying than to help someone sell the largest investment of their life,"
ReplyDeleteActually it's much more than about hair dyes. The chemicals used in hair perms are dangerous and have the potential to do serious physical harm if used improperly. In fact many beauty supply shops won't sell you these chemicals without a valid cosmetologist license. Cosmetologists also have to be trained in the proper sterlization of their tools to prevent infections and the possible spread of diseases/parasites.
Marguleas' statement is pretty insulting and shows an ignorance about the cosmetology profession. When was the last time a person's immediate health was jeopardized by a real estate agent?
For the real bob --
ReplyDeleteActually the biggest factor in the declining quality of ed school graduates is that smart women have so many other career options available to them now. I know legions of brilliant women in their 70s and older who had to choose: teacher or nurse?
actually to become a doctor it took me 4 years of college + 4 Years of medical school + 3 years or residency.
ReplyDeletetotal hours at 40 Hrs/wk x 8 years (college and med school) + 80 hrs/wk x 3 years internship/residency
=27360 hrs and trust me that is definitely underestimated
+ jefferson med school in philly cost me 25K a year x 4 = 100K debt not including college.
starting salary for primary care = 95K