Your Real Estate Agent's License: Does it Matter?

Most states have a Real Estate Commission that identifies requirements for new, upgrading and continual educational requirements for license holders. All states require that real estate practitioners hold valid licenses.

But does the kind real estate licenses matter? Isn't holding any license good enough? Like any profession, more experience and a higher level of licensing and educational achievement can mean better results, but not always.

Licensing varies widely by state; there are no federal minimum standards, so each state does what it believes in necessary for the consumer and for the industry.

For example: In Maine, a new licensee ('Sales Agent') needs 55 hours of training. In Texas, a new licensee must have 270 hours of training; in Maine, after a practitioners second year, the licensee must upgrade to an Associate Broker License after an additional 55 hours of training; in Texas, there is no mid-level Broker, just a Broker designation, after 900 hours of additional training.

Most real estate agents are not fresh out of school; they come from a variety of other fields and educational backgrounds and come to real estate for the promise of easy/big money, scheduling flexibility and the ability to work as an independent contractor. However, most agents don't make it to their second year, as the realization that weeks, maybe months without a steady paycheck begins to set in, especially with newer agents developing their business.

When you're shopping for an agent, or checking on one you already have, consider these guidelines:

1) New Agents: Entry-level licensing throughout the U.S. is called a variety of names: Sales Agent, Agent, Salesperson, etc. New licensees typically are very motivated, have the latest in training and knowledge of current license laws and practices and have little business. That can mean that your listing gets more attention than it might by a busier agent. Entry-level agents cannot work for themselves, and must work under a brokerage that is responsible for their actions.

Every agent has a first buyer and first seller, and that can mean a lot of motivation with no experience, or a dedicated agent who realizes that your recommendation for a job well-done can launch a successful career. Some new agents will avoid identifying themselves on business cards by choosing, "REALTOR" as a title if they hold that designation; if you're in doubt about your agent's license status, ask or consult your state's website for licensing. Most have on-line licensee search capabilities.

2) License Upgrades: Many state require a mandatory licensing upgrade, but not all. This typically means additional classroom instruction and possible evidence of documented field experience along with an exam. In states where upgrading is not mandatory, experienced agents may never upgrade; others may upgrade at the first opportunity, or during off-season times in a particular market when there is more time to devote to continuing education. Some agents will upgrade to mandatory requirements, but go no further and will have very successful careers and businesses.

3) Brokers and Bosses: Most states have a terminal license at the Broker level, and most state require additional training and tests. Some states allow broker licensees to manage on office by being the 'designated broker', managing broker,' responsible for all office and agent compliance with state and local laws. Other brokers may plan on opening their own firm at some point in career; some simply want the title and the peer recognition that comes with Broker status.

If licensing status matters to you, check with your local Real Estate Commission, and either ask your agent or check them out on-line to see what license they hold. It's not necessarily an indication of success or competance but it may be a good place to start if the agent is unfamiliar to you, or you are in a new area and don't have any personal agent recommendations.

http://www.maine.gov/pfr/professionallicensing/professions/real_estate/license_types.htm
http://www.trec.state.tx.us/licenses/default.asp