Thursday, May 25, 2006

Too Many Choices

The California Department of Real Estate announced yesterday that there are about 500,000 real estate licensees in the state – which means that one in every 52 adults in California has a real estate license.
In 2005, the number of licensees grew 14 percent over the previous year to a then-record 476,000 licensees. That total represented a 57 percent increase compared to the number of California real estate licensees in 2000. The number of licensees reached 495,000 as of April 2006.
Jeff Davi, commissioner for the Department of Real Estate, said in a statement, "The level of interest in real estate licensure is unprecedented. With so many new licensees, the DRE has also increased its consumer protection efforts."
The department’s idea of increased “protection efforts” is to increase their presence on the Internet. It is available on the Department of Real Estate's Web site at At this site, consumers can check the license status of real estate agents, mortgage brokers and others involved in the processes of purchasing or refinancing their homes.
Unfortunately there is no competency evaluation on the DRE ‘s web site. The problem that consumers have is not determining if someone has a real estate license or not but determining who is competent and trustworthy, a rating that the DRE will never develop.
One rating system that consumers can use is Realtor membership. Not all of the 500,000 agents are members of the California Association of Realtors. There is a difference between a state licensee and a Realtor. Realtors must swear to abide to a professional code of conduct not found on the state’s web site. Doctors may not don’t need to belong to the American Medical Association but I am assured that mine does and at a minimum subscribes to their monthly magazine featuring the latest in procedures and treatments for sick patients. Of the 500,000 state licensed agents, 150,000 are Realtors.
Another rating system for competency that the state does recognize is “Brokers”. A licensed real estate broker has meet more stringent testing, educational and experience requirements not found in salespeople. In California of the 500,000 licensed agents 35,000 are brokers. State law requires that licensed agents only work for brokers not other licensed agents.
There are good licensed agents who are not Realtors and there are brokers who know less than the agents for who they are responsible. But when it comes to money why take any chances?


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