Jill Chodorov, an associate broker with Long & Foster, writes an occasional column about local market trends and housing issues.
Each state has slightly different methods for regulating the real estate industry within its borders. But they all have the same goal in mind — to protect the public.
One crucial aspect of protecting the public is ensuring the competency of individuals providing residential real estate services.
In order to ensure the competency of those in the business, most states have created multiple levels of licensure, with each step up requiring increased pre-licensing education and additional continuing education.
“Some states have just brokers, some have both salesperson and broker licenses. Maryland has three levels — a salesperson, an associate broker and a broker,” said Farhad Rozi, the instructor of the broker pre-licensing course I attended this summer.
D.C. and Virginia maintain the same three levels of licensing.
A salesperson license is an entry-level license. A person holding a broker’s license may own a real estate brokerage and may hire other licensees to sell real estate. An associate broker is someone who has completed the pre-licensing requirements for obtaining a broker’s license and has passed the broker’s exam, but continues to work as a salesperson for a broker rather than operating her own business. (I am in the latter category.)
To have an active license, every salesperson and associate broker must be affiliated with and work under the authority of a licensed broker.
How does this protect the public?
“The most important benefit to the consumer is that the salesperson has someone with higher credentials to use as a resource,” Rozi said. “In addition, the consumer has someone to complain to if they are unsatisfied with their salesperson. It provides multiple levels of accountability to the consumer.”
Within each branch office of a brokerage firm, a branch manager is responsible directly for the salespersons working there. D.C. and Virginia require that branch managers have a broker’s license. Maryland only requires that branch managers have at least three years of experience as a licensed salesperson.
“The Virginia licensing regulations are designed to ensure that real estate professionals have minimum competency in the industry,” said Mary Broz Vaughan, spokeswoman for the Virginia Real Estate Board.
But is minimum competency enough when seeking guidance in what is most likely the largest purchase you will make in your life?
“Maryland, Virginia and D.C. say that a licensed salesperson is qualified to sell real estate,” said Nick D’Ambrosia, principal broker for Long & Foster Real Estate.
Bryan Waters, an area manager for Redfin and a fellow classmate this summer, differs. “The 60 hours of class time required to get a salesperson license gives you the basics, but I feel I have more expertise in the laws having completed the 135 hours of class time for the broker’s license,” Waters said.
Valerie Blake, an associate broker of Keller Williams Capital Properties, obtained broker’s licenses in Maryland, D.C. and Virginia. “I did not get those licenses to become an independent broker,” Blake said. “It lets my clients know that I have put additional time and energy into learning and honing my craft. Getting a broker’s license is the non-collegiate equivalent of a master’s degree in selling real estate.”
The competency of the sales person is something you should seriously consider when selecting a person to represent you in a real estate transaction. A licensed broker isn’t necessarily better than a sales person. Still, it’s important to understand what the person knows and doesn’t know and whether the person has the right training and experience to meet your needs and handle your particular transaction.
Here’s how to determine whether an agent or broker is the right fit for you:
• No matter what level of licensing, make sure the agent is attending weekly sales meetings and other educational opportunities in their broker’s office or at the local real estate association office. Important updates to contracts and legislation are shared at those meetings. It could greatly impact you as a real estate consumer if your agent is unprepared or uneducated.
• Just as important, check with the agent’s office to be sure that weekly sales meetings and educational opportunities are actually being offered. This will be a clue to the level of support and competency you will receive from the broker in case an issue arises.
• Most quality brokerage firms invite settlement attorneys, home inspectors, lenders and appraisers to speak at weekly sales meetings to provide updated pertinent information.
• Lastly, check with the real estate commission to be sure the agent’s license is active and is in good standing.
Previously from Jill Chodorov:
Jill Chodorov can be reached at firstname.lastname@example.org