Do away with real estate licensing laws? What movie was he watching?....Escape from New York?

lw4n6581.jpgPart 1 Real Estate Licensing Laws are NOT Strict Enough

Greg Swann’s (Bloodhound Realty) blog about doing away with licensing laws is no different from any radio talk show host throwing out possible topics of discussion at the beginning of their program shift. Occasionally, the host will bring up what seems to be an excessively outrageous subject. The radio host’s intent to get a dialogue started is sealed. Sealed with a firestorm of regular listeners calling in stating, “long time listener of your show, first-time caller…you can’t possibly believe…”, etc. Of course, this is always (a) on a slow news day and (b) later referred to by the host as “good radio.” Unbeknown to the host, “good radio” is listening to the radio host engage in verbal gymnastics by rationalizing their position with every angry caller’s point and counter-point. Swann’s “good blogging” created a lot of written gymnastics on his part including the friendly exchange with Chris Berg, of San Diego (heck, they are friends) Berg demonstrated the common California line-of-thought regarding real estate licensing laws.

I’ve interviewed social workers and real estate attorneys many times regarding how the public is defrauded (mortgage fraud to elder financial abuse) within the real estate arena. All too often those “nice persons” who committed acts against consumers are unlicensed members of the public.

While we have over 520,000 licensees in California, over 100,000 of them new in the last few years (thanks to the dotcom bust) and in 2006, 85% of new licensees are under the lightweight “Conditional License.”

The California’s, Jeff Davi, Department of Real Estate’s Commissioner noted last year that with this increase in licensees operating when the market cools, complaints filed by the public have increased. This is not news to astute practitioners or real estate attorneys.

California laws created what is now referred to as DRE in 1919. The DRE mission is “To protect the public in real estate transactions and provide related services to the real estate industry."

California salesperson applicants must provide proof of legal presence in the US and undergo a criminal background check. Their fingerprint reports are sent to and reviewed by the Department of Justice and the Federal Bureau of Investigation.

Not Soon Enough: California Association of Realtors sponsored the bill AB 2429 which targets the “Conditional License”

I’ve always said that the # ONE mistake made when negotiating a residential real estate transaction is when participants lack understanding of the responsibilities of all of the parties and their representatives. After October 1, 2007, a salesperson will have to complete three college-level courses (including Real Estate Practice) prior to receiving a license. The Conditional License allows for only one college course (Real Estate Principles) prior to representing consumers in real estate transactions. Let’s not send any more cases to real estate attorneys or government agencies. They don’t need the work.