Part 2 Real Estate Licensing Laws Are Not Strict Enough

Real Estate Train Derailment: “Degreed Brokers”
In Colorado, in order to become a real estate broker, one must have a
salesperson license and two-years full time experience. California’s Real
Estate Commissioner has the authority to substitute a broker applicant’s
(two-years full time) sale experience with a degree from a four-year
college or university.

Similar to the dramatic increase of the lightweight “Condition Sales
License”, California has experienced an alarming rise in “Degreed
Brokers.” The California Association of Realtors, (C.A.R.), was policing
its own by sponsored State Assembly bill AB 1963 (Leslie) which
eliminated the commissioner’s ability to accept a broker applicant’s
four-year degree in lieu of two-years of full-time real estate sales
experience.

In 2006, Governor Schwarzenegger returned (unsigned) AB 1963 (Leslie)
to the State Assembly, stating the bill is “removing a provision that has
been in existence for over thirty years,” and would “place further
impediments on those seeking to start a business and work independently.”

Governor, we ask a carpenter to provide work experience, before applying
for a contractor’s license, to protect consumers while he or she works on
your property. However, in order to sell, finance or manage that same
property, No Work Experience Is Needed? Real estate transactions in
the double 00’s have little in common with transactions in the 1970’s.
Anyone involved in a real estate transaction in the last ten years can
attest to that. Thirty years ago the sales contracts were one legal page
long and “caveat emptor” ruled. California Association of Realtors, (CAR),
was sponsoring last year’s AB 1963 “to create higher standards for
managing brokers in order to increase the knowledge and accountability
of all agents when conducting transactions.” Scary thought: “Degreed
Brokers” never represented parties in commercial and/or residential
sales, property management or financing. Having worked in all three
fields it baffles me how anyone could competently train and supervise
agents and their activities/transaction with what in most cases, are
consumers’ largest investment. California consumers!

The old saying “there is no substitute for experience” is especially true
in real estate. Real estate attorneys are the first to admit they don’t
know the day-to-day workings of a real estate professional. That’s
why they hire “expert court witnesses.” (To explain the Standard of
Care and Standard of Practice in a specific field of real estate)

This year, C.A.R sponsored SB 226 (Negrete McLeod) Degreed Broker
Requirements, which mandates, before the Commissioner grants
exemption for two-years sale experience, that the broker applicant
must have a major or minor in real estate.
Why will such a completely watered-down version of last year’s
“Degreed Broker” law, land on the Governor’s desk? Politics.

Pat Kapowich,
“Negotiating Smooth Transactions Throughout The South Bay”
SiliconValleyBroker.com