Real estate agents and brokers often say that nearly all they need to know about their profession they learn on the job.
The bar to getting a real estate license in New York State is laughably low, and continuing education requirements are sometimes viewed as a mind-numbing formality that must be endured, rather than an enriching educational experience.
But as the ranks of new, inexperienced agents swell, lured by a hot real estate market and high commissions, the New York State Assembly passed a bill in May mandating 45 additional hours of course instruction doubling current requirements. Agents also have to pass a written exam to renew a sales license after two years, under the bill.
A similar bill was introduced in the state Senate, but legislators balked at the idea that a salesperson could be stripped of their license if they failed the renewal exam.
The proposed law is far from dead.
While the city’s biggest real estate trade group, the Real Estate Board of New York, is critical of bill, the Albany-based New York State Association of Realtors is pushing for its passage, and plans to come out with amendments to the bill in January that it says will insure its quick approval.
“It’s an attempt to raise the bar and increase the level of professionalism in the industry,” said Mike Kelly, government and political affairs representative for NYSAR. “This legislation is the result of years of work by our committees.”
Kelly said the main change to be introduced will involve getting rid of the provision that an agent will be stripped of their license if they fail the renewal exam. Instead, a salesperson will have to take an additional 15 hours of coursework if they fail the test, he said.
Assemblyman Mark Weprin (D-Queens), chief sponsor of the bill in the assembly, said opportunistic fly-by-night agents are the chief target of the legislation. He also predicted quick passage in January when the assembly reconvenes, though the amendments still need to be debated in both the senate and assembly.
Justification for the new law rests largely upon the fact that New York presently ranks 39th in the amount of training hours required, with the new 90-hour provision for salespersons bringing it more in line with states such as California (135 hours), Texas (120) and Nevada (90), while surpassing New Jersey (75), Connecticut (60) and Florida (63).
REBNY fought to remove the new examination requirement on the rationale that two years of on-the-job training and coursework is sufficient in itself.
“How much are you going to impose upon these people,” asked Eileen Spinola, a senior vice president at REBNY.
Neil Binder, principal at Bellmarc, said on-the-job and in-house training by companies is more effective than continuing education required by the state.
“You’re brain dead and under the knowledge that you have to go through with it over the next two days,” he said of some continuing education courses. “And 50 percent of your classmates are eating donuts or taking a pee and are simply not mentally connected.”
“It’s not a matter of length of time but of the quality of what’s being taught,” he said.
In addition to targeting salespeople, the bill would also add provisions for brokers, those who can run a real estate office, raising licensing requirements to 135 course hours from 90 and two years’ experience under a broker’s supervision. Only one year is required at present.
The bill would require agents and brokers to have identification cards with their photographs so that home buyers and sellers know they are working with a licensed real estate professional.
Spinola, who has worked with the state in developing curriculum, said it’s not tailored to New York City. The city differs from most areas in the state with its high percentage of co-op buildings. Continuing education requirements say only 10 percent of course offerings can be tailored to the locality, she said.
P. Gilbert Mercurio, CEO of the Westchester County Board of Realtors, agreed with the need for changing the content of courses, but also took REBNY to task for its objection to the examination requirement.
“There’ll be no performance measure, no test required,” he said. “So it’s possible to be present in a continuing education class and not absorb anything because your mind is not there.”
Barry Hersh, associate director of the Steven L. Newman Real Estate Institute at Baruch College, said additional classes could make sense if the content of courses is improved.
“If you had more hours you could add more coursework that modernizes the program and makes it more relevant to today’s world,” he said. “Additional training only makes sense if there’s real content that adds real value and I think the number of hours is a limitation.”
Hersh pointed out that there is little discussion of commercial real estate or land-use issues in broker courses and aspects of mortgages and financing are all treated in a rudimentary fashion.
But brokerage firms aren’t relying on any additional state educational requirements to displace the training they do.
“When someone new comes to our firm they spend three weeks in extensive training and we don’t let them hit the offices without it,” said Corinne Pulitzer, a senior vice president and director of professional development at Douglas Elliman.
“If the answer is, ‘let the state take it over,’ I don’t know if that’s inclined to solve the problem,” said Binder. “Sit down with your people and teach them what to do or you get what you deserve.”