A recent National Association of Realtors report warns the real estate industry is weighed down with part-time, untrained, unethical and incompetent agents. The knowledge gap among agents threatens the real estate industry, according to the report. NAR commissioned author and visionary Stefan Swanepoel to help produce the report, which is the result of industry research, a survey of nearly 7,900 Realtors and interviews with 74 CEOs and senior executives from franchisors, brokerage companies, Realtor associations, large technology companies and Multiple Listing Service organizations. The DANGER! report is a comprehensive and objective analysis of the real estate industry’s most significant 10 threats in each of these categories: agents, brokers, the NAR, associations and MLS.
What the report doesn’t offer is solutions. Strategically interpreting the dangers and identifying solutions falls on industry leaders.
“It is the strategic interpretation of each danger by leaders and how they decide to respond that provides each organization its unique competitive advantage and sets them apart from their competitors,” according to the NAR report.
Too many not-so-good agents
In the first of 10 dangers impacting real estate agents, the report addresses the large knowledge and competency gaps in real estate, due to low entry and continuing education requirements, as well as the lure of big, quick money. It compares real estate with other professions, such as medicine and engineering, which can require thousands of study hours to gain entry.
“Even becoming an earth driller requires an average of 704 hours of instruction, and becoming a cosmetologist requires an average of 372 hours,” the report noted. But to become a licensed real estate agent requires an average of only 70 hours, with the lowest state requirement being 13 hours.”
As a result, the report said not-so-good agents are driving down the industry. Add to that an empty pipeline of meaningful and robust educational initiatives to raise the bar for real estate agents nationally, and a crisis may be on the horizon.
Brad Chandler, CEO and co-founder of Express Homebuyers, a real estate investment company based in Springfield, Va., agreed. “The incompetence of some agents is startling,” he said.
Chandler has 20 years of experience in real estate. During that time, he has been involved in more than 4,000 real estate transactions and dealt with countless agents. He shared recent experiences where a part-time agent told the seller to remove all furniture in the home in order to sell it. The sellers followed the agent’s advice and were sleeping on the floor.
Additionally, Chandler said he often sees agents who allow the home inspection contingency timeline to expire without providing a list of repairs to the seller. Another common blunder occurs when a listing agent discloses the price for which their client’s home is under contract. If the prospective buyer knows the contract price, he or she will then offer just above that contract price, rather than the full listing price.
Upping educational requirements is among the solutions to the problem, according to Chandler. Read more on his and other agents’ recommendations in the next installment of this 3-part article.