Why have a real estate license?

This month’s magazine focuses on the legal aspects of being a REALTOR®. The very essence of that topic is the actual license provided by the State to conduct the business of real estate. In fact, it is illegal for someone to present themselves as a real estate professional without a license.

Now why would anyone need a license to do something as seemingly simple as selling a house? Well, just for starters, Michigan law requires it. To obtain a license in Michigan, you must be 18 years of age or older, complete 40 hours of real estate fundamentals, pass an exam administered
by Applied Measurement Professionals, and complete Continuing Education courses at the rate of “six clock hours every renewal year; 18 per three-year cycle.” And, from the Department of Licensing and Regulation website: “An application must verify required real estate experience and successful completion of all required education. Some applicants will be required to provide other documentation depending upon their background, e. g. all applicants must possess good moral character; applicants who currently hold, or have ever held a real estate license in another state or jurisdiction must submit a current letter of good standing from each regulatory entity.”

There are people who believe that buying and selling real estate is simple, but like a lot of things in life, it’s not what it seems. In fact, I just spoke to someone who had decided that they would sell their house without using a REALTOR®, thinking they could easily do it themselves.

The task, however, became increasingly daunting and complicated, and they’ve since changed their mind. Remember your last transaction? All the forms, all the signing? The client probably thought the pen was going to be permanently attached to their hand by the time everything was finished. Oh, and prior to all of that, remember all the houses you looked at before you found “the one” for them? It could take months of hard work, but you did it — you found a home that would meet all their needs, and you even remembered that they needed “a special place to meditate” and a workbench in the garage. Their requirement list was extensive, and yet you were ever patient and dedicated.

Okay, then. Those are details a good REALTOR® can handle. It takes patience, right? But still, why a license? Let’s explore this further. Think back again to those forms: There were forms for becoming the buyer’s agent, forms for making an offer, and then all the forms at closing —
HUD/RESPA just for starters. Some were so complicated they probably signed where you drew the “X” without even reading all the fine print. As you know so well, a licensed REALTOR® knows exactly what they say and exactly what they mean — and a professional can explain that meaning in layman’s terms. I wonder if someone could still think it’s easy? And, actually that’s only the tip of the iceberg.

A licensed REALTOR® fulfills many and varied roles: counselor, advisor, financial planner, tax specialist, negotiator, explorer, and facilitator. There are also fiduciary duties to the client, confidentiality issues and more. There’s knowledge of the area. There’s knowledge of the market. There’s knowledge of the key players — the bankers, the appraisers, the inspectors, the title companies, the insurance agents, the loan officers, the surveyors, the transaction brokers. And most even know math — Yikes!

Licensed REALTORS® also know the law. They need to. To not know the law is to open up a whole can of worms for the agent and the clients. Licensed REALTORS® learn real estate law.

License law, in short, isn’t really about the licenseholder; it is about the consuming public. The requirements and regulation of those requirements are about protecting the public’s interest in what is generally considered the single biggest investment an individual will make in their lifetime. What else? Okay, licensed REALTORS® know how to market a client’s property — how to put together a market value based on a multitude of factors: the appraised value; the price of similar homes selling in the area; the speed with which the homes are selling; and more. They can do the same thing in determining if a house the client wants to purchase is fairly priced.

There are laws regarding fair housing and equal access for all that prohibits discrimination of any kind. These are vital tools to know, understand, and follow. And, as you learned early on, variables change quickly, so nothing in the laws or regulations becomes simply routine.

So, in the process of becoming licensed to practice, you‘ve needed to learn a lot. It’s not just about handing out newly printed business cards or hanging out a shingle. It takes a lot of specific education to do the job — and your clients — justice. It takes a commitment to knowledge and excellence to become a licensed REALTOR®.

Once licensed, there is a plethora of helpful information available to you. By joining your local association — your Michigan Association of REALTORS® and the National Association of REALTORS® — you benefit from a multitude of specific publications designed to assist you in achieving your real estate professional goals — on marketing, on servicing multicultural clients, on working with first-time homebuyers, on buyer psychology; you can practically name it and there’s a publication made to help you. There are Continuing Education courses offered to help you keep your license, legal professionals on hand to assist you, seminars and conventions offered, as well as advocacy programs specially designed for REALTORS®. You have many opportunities to get involved further by serving on a committee, a task force, becoming a delegate to the annual convention, running for MAR Director, for NAR Director, and others. Your level of involvement will be up to you, just as your level of commitment to anything is up to you. It depends on what you want from your profession and what you want to give to your profession. Whether you are helping a client or sitting on a committee, the licensed real estate professional is, above anything, all about service.

In closing, being a licensed Michigan REALTOR® means you’ve made a commitment — you’ve accepted the intention of becoming a recognized professional by completing the coursework necessary to obtain your license, keeping up with changing real estate law, and accepting and practicing the established Code of Ethics. Being a licensed Michigan REALTOR® is becoming the prime supporter of your client’s needs and rights. REALTORS®, the best of the best, understand the responsibilities of being licensed and how it protects the public. And finally, being a licensed Michigan REALTOR® is accepting that you will promote the real estate business by example. It’s a lot more than just for the fun of it, huh?