Real Estate and the Knowledge Gaps that Threaten the Industry
March 31, 2016 |
The National Association of REALTORS® published its D.A.N.G.E.R. report in May 2015. The goal of this report is to gather a Definitive Analysis of Negative Game Changers Emerging in Real Estate. “Each day, we see evidence of changes in the industry and our business that can be both exciting and unsettling. This report is a forward looking assessment of threats that could emerge from the prospective agents, brokers, the NAR, state and local associations and multiple listing services,” states the NAR.
This report identifies 50 threats that could impact the residential real estate industry. The #1 DANGER to agents was identified as “Masses of Marginal Agents Destroy Reputation.” But what does this mean to you?
This DANGER dives into the fact that the real estate industry is burdened with a large number of “part-time, untrained, unethical, and/or incompetent agents.” This knowledge gap threatens both the reliability and integrity of the industry, leaving home buyers to question the trust they place in their real estate agents.
In context, the report states:
The knowledge and competency gap from the most to the least is very large, due to the low barriers to entry, low continuing education requirements, and the lure of quickly making big dollars. For decades the industry has held the opinion that it’s a profession, however the reality is that those outside the industry don’t hold the same opinion. Most professions (doctors, lawyers, accountants and engineers) require thousands of hours of studying, beginning with a bachelor’s degree. Even becoming an earth driller requires an average of 704 hours of instruction, and becoming a cosmetologist requires an average of 372 hours. But to become a licensed real estate agent requires an average of only 70 hours with the lowest state requirement being 13 hours.
The delta between real estate service and poor real estate service has simply become too large, due to the unacceptably low entry requirements to become a real estate agent. Professional, hardworking agents increasingly understand that the “not so good” agents are bringing the entire industry down. (DANGER Report, 20-21)
In short, real estate agents are simply not being educated to the highest standard, resulting in poor quality agents. There are currently no educational initiatives to raise the national bar for the real estate industry across the board. “This lack of agent knowledge is a significant danger in itself, when combined with a lack of basic competency it could be destructive and harmful to both the industry and the consumer,” (DANGER Report, 21).
What does this mean for Hondros College of Business?
Our customers and students strongly believe that the real estate pre-licensing/education system that has served Ohio so well should remain in place. Our customers and students have emphatically told us that quality pre-licensing education is important, as it impacts the integrity and professionalism of the profession, and that this education needs to remain a qualified, accredited program through higher learning.
Should Ohio ever proceed to lessen the requirement behind real estate pre-licensing education, Hondros College of Business would not support this effort and would work to strengthen our law. We look to all our Alumni for your support. Change is inevitable, but change needs to be for higher standards of excellence, not the minimal requirement.
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