Broker Experience Working Group Report


To: Members of the Legislative Committee

From: Steve Goddard, Chair,

The working group grew out of discussions regarding the recommendations of the Business Practices Task Force. That Task Force recommended, among other things, that C.A.R. sponsor legislation to:

- Repeal the conditional license; and,

- Require so-called "degree brokers" to demonstrate the same two years general real estate experience as other broker applicants.

Both recommendations were adopted and have become AB 2429, Negrete McLeod and AB 1963, Leslie, respectively. Both bills are now half way through their journey to the Governor.

During the discussion of the two legislative motions, the question was raised as to whether C.A.R. should consider legislation to further restrict the type of experience that would be acceptable for broker applicants. The Legislative Chair sought volunteers for an informal working group of the Legislative Committee, with the following MISSION STATEMENT:

To consider whether the experience required in order to obtain a Broker's license should be changed to include a supervisory component.

Conclusion: After extensive discussions, the Working Group reached a consensus that attempting to specify the actual details of the many types of experience brokers might have, particularly as they will be applied to areas of a brokerapplicant's future practice, is not feasible. 

Working Group members cited at least two reasons:

First, the scope of practice of the real estate license is so broad that establishing a rule that is anything more than a general standard (which we already have) of "full time in the business" is not feasible.

Second, requiring specialized license experience, especially if it limits a licensee's scope of practice, runs afoul of historic policy concerns about creating a specialized license.

We have agreed that the greater the knowledge base that a Broker has about the business of real estate, and the "business of the business,"  the more effective they will be in supervising and training licensees. Our ultimate goal is to provide a better, more professional experience for our clients, thereby increasing our satisfaction quotient with the public in general.What is now left is to discuss the "how.”

Recommendation:

1. The Working Group recommends that the Legislative Committee explore the introduction of C.A.R.-sponsored legislation to require new applicants for a broker's license to complete a college level course in real estate office management skills as part of their pre-licenseeducation.

2. The Working Group recommends that the Legislative Committee explore the introduction of C.A.R.-sponsored legislation to require completion of a continuing education course in real estate office management skills as part of the course work for renewal of a broker's license.

3. The Working Group recommends that the full committee consider recommending the creation of a broker training program like the new "Quick Start" course for new salespersons. The course would complement CRB designation course work.Background: Set out below are some of the methods we have discussed to date as possible methods of achieving the goal of improved experience.l.  LEGISLATION.  This legislation would be required in order to changethe license prerequisites. It is statewide and can be directed to all licensees or all applicants. Besides the bills discussed above, AB 223, Negrete McLeod, which C.A.R sponsored to require a new Risk Management course is an example. The Work Group hasalso discussed legislation for a 3-tier license, modeled after Colorado's "all broker" law. However, the change would have required dramatic changes in the license law structure, and it is not yet clear that the Colorado law has actually lead to a dramatic  improvement.  The Colorado "all Broker" model allows for different types of brokers, including Associate Broker and Independent Broker in addition to Employing Broker. An important concept of the Colorado law is picked up in recommendation #1, namely concentrating more management training skills in the ranks of brokers who are entitled to supervise or employ other agents.2. MENTORING/TRAINING. In our discussion, this was the "chicken and
egg" quandary if it was a pre-requisite to licensure. How does a licensee become a fully qualified supervisor with 1-2 years experience without actually supervising licensees? One possible solution would be to mentor or train a licensee to possible "Assistant Manager" status. This solution would be moreeasily achieved in large brokerages. Yet small brokerages are a considerable presence in the California Realtor community. The requirement of an owner, Manager, and Assistant Manager would most likely be prohibitive for small brokerages.3. DESIGNATIONS AND/OR ADDITIONAL TRAINING. This solution could be
accomplished by a requirement for existing Designations that are specifically tailored to leadership and supervisory roles, e.g. CRB-Certified Real Estate Broker, LTG-Leadership Training Graduate.Thereis a new C.A.R. Quick Start class being taught by C.A.R. and  local associations.  It educates licensees in selling property, forms, legislation, regulation, and other items not required by law in order to obtain their original license, but clearly necessary in order to successfully list and sell property. An analog for new brokers is not yet in the works.