The real estate industry has called for stricter education requirements amid rising levels of fraud and qualifications which can be completed in a matter of days.
At the Real Estate Institute of New South Wales’ recent Industry Summit leaders were united in their desire for higher standards, REINSW deputy president John Cunningham told Australian Broker
“It’s gotten to the point now where it’s so easy to get your real estate agents’ license that the people are just not getting educated as to what they require so the standards are just dropping lower and lower and lower,” says Cunningham.
Real estate agents deal with dozens of different pieces of legislation and handle millions of dollars in trusts, says Cunningham, and a high standard of education is crucial.
Currently there are providers who will issue a real estate license after as little as four days of study, says Cunningham.
“It’s just a farce. The requirements for a lawyer are four to six years of university. Real estate agents are dealing with just as many pieces of legislation and in most cases dealing with more money going through their trust accounts so they’re opening things up to fraud.
“I’ve seen probably more trust account fraud in last couple years than I’ve seen in a long, long time and I think it’s just the beginning in terms of people who are working in the business who shouldn’t be.”
Forging reform and introducing Australia-wide minimum requirements is the biggest challenge the industry has faced in over 30 years, says Cunningham, but often legislators are less than co-operative.
“In the past there’s been this advent in government to take away barriers of entry to certain industries and all that does is lower the standards and the person who suffers in the end is the consumer.”
Raising the bar by introducing national minimum requirements and a minimum period of time required practicing as an agent before a license can be issued will undoubtedly improve the experience of brokers, says Cunningham. The local government in New South Wales has been highly supportive of this, he says.
“Brokers want to be dealing with a professional on the other side. All professionals that are dealing with the real estate industry have an expectation that that person knows what they’re doing… that we have knowledge and we are a reliable provider of advice and we know our product. I believe most real estate agents at the moment don’t even know how a house is built let along what it's worth.”
Currently there is a huge disparity between state requirements, says Cunningham, from Tasmania where the minimum requirement is a diploma, to "the lowest common denominator" of New South Wales. Within states there is also a huge disparity between individual agents.
Many agents go out of their way to achieve higher qualifications and have a wealth of experience in the industry, says Cunningham.
Loan Market director of sales Mark De Martino says Ray White’s agents are some of these.
“Anyone that comes through here not only has the requirements of the franchise but also goes through quite an intense induction process… we’d like to think we have very high standards and I think that’s reflected in our high customer satisfaction ratings.”
Zarko Jokic, Loan Market Broker Academy Manager NSW/ACT, adds that while formal qualifications are important, what is more relevant is the professional relationship brokers build with agents.
“Minimum standards have their place, but would I crucify a real estate agent who has been delivering quality service but doesn’t have minimum standards? Probably not.
“It’s like anything, if you want to partner with someone you’ve got to do some research, have a target in mind of who you want to work with, check peer review sites… but what I think is so much more powerful is the idea that a qualification doesn’t mean they’re going to deliver quality.
“If someone has gone through the school of hard knocks instead of tertiary education they can still excel in their field. I’m not as concerned with minimum standards, although it does have a flow-on effect… for me, when I’ve built relationships with people it’s not so much what qualifications they have as the quality of the person and their shared value.”