February 26, 2012 in Business

Broker’s level of expertise may not be what you’re seeking

Tom Kelly
 

When we bought our first home, my wife and I were stunned to discover that the person representing us in the transaction did not have a real estate license.

Here we were, with every dime we’d ever saved, trusting our nest egg to a “professional” who had come highly recommended.

In those days, as long as a person was “preparing to become” a salesperson and was working in a broker’s office, it was possible to represent a buyer, seller – or both – in a Washington state residential transaction. This preparation period was supposed to have been only six months but some offices stretched that time frame for particular individuals.

Knowing that we would one day leave our tiny first home, I wanted to arm myself with at least as much information and knowledge as the person representing our interests. I took a real estate law course, an accredited real estate salesperson’s course and then passed the state’s salesperson’s exam. My license was on “inactive status” for nearly two decades until the year I failed to pay the renewal fee. I was then informed I would need 30 clock hours of instruction to get it reinstated. I declined because I did not have the time nor interest and only continued paying the annual fee so that I could receive the licensee newsletters.

Real estate licenses, and the responsibilities that come with them, have come a long way. In fact, in some states (like mine) there are no salespersons – only brokers. While the additional time and effort it takes to obtain the broker status will benefit the industry, the changes are confusing to consumers who have been conditioned to thinking that “broker” is synonymous with “boss.”

For example, a friend from out of state called a multi-office company looking for a particular agent. It turned out the receptionist was new and didn’t know the agent worked in a different branch.

“So, I said, ‘Just let me talk to the broker,’ ” my friend recalled. “And the woman on the phone said, ‘Just about everybody here is a broker.’ I went to their website and found out she was right. Not only are they all brokers, but they’ve got a lot of alphabet soup after their names.”

Attorney Annie Fitzsimmons said the Washington state license structure works like this: A firm is licensed as an entity. In addition to the firm license, there are only two additional licenses. Those include managing brokers and brokers. A managing broker is a broker who has been licensed for at least three years, taken additional education, passed an additional exam and earned the title “managing broker.” A managing broker may manage brokers, but is not obligated to do so. A firm must appoint one of its licensed managing brokers as designated broker.

The term broker does not connote any level of expertise or competence beyond that of being licensed. The single factor true of all brokers, however, is that they may not manage other brokers.

According to Fitzsimmons, every broker is now accountable for assuring that all brokerage services in which the broker participates are compliant with the License Law, the Agency Law and the Washington Administrative Code.

“While it is true that a consumer could always sue a salesperson based on claims that the salesperson erred in handling a transaction, the Department of Licensing could rarely go straight to the salesperson for accountability,” Fitzsimmons wrote. “The Department, instead, called on the designated broker to account for the actions of a licensed salesperson. Now, the Department can go straight to the broker who participated in the transaction and hold the broker accountable, on a licensing level, for the broker’s actions.”

And, only those persons who are members of the National Association of Realtors are “Realtors.” Others are simply salespersons, I mean brokers.

Now, for the alphabet soup. Realtors can earn a variety of designations. They use the identifying letters to indicate a specific expertise. Here are some of the most common. (You may want to print it out so can you know your broker’s specialty.)

ABR – Accredited Buyer Representative; ABRM – Accredited Buyer Representative Manager; ALC – Accredited Land Consultant; AHWD – At Home With Diversity Certification; CAE – Certified Association Executive; CCIM – Certified Commercial Investment Member; CIPS – Certified International Property Specialist; CPM – Certified Property Manager; CRB – Certified Real Estate Brokerage Manager; CRE – Counselor of Real Estate; CRS – Certified Residential Specialist; e-PRO – Electronic Professional Certification; GAA – General Accredited Appraiser; GREEN – Green Designation; GRI – Graduate Realtor Institute; PMN – Performance Management Network; RAA – Residential Accredited Appraiser; RCE – Realtor Association Executive; REPA – Real Estate Professional Assistant Certification; RSPS – Resort & Second Home Markets Certification; SIOR – Society of Industrial & Office Realtors; SRES – Senior Real Estate Specialist; TRC – Transnational Referral Certified.

Tom Kelly is a former real estate editor for the Seattle Times.


Thoughts and opinions on this story? Click here to comment >>

Get stories like this in a free daily email