When we bought our first home, my wife and I were stunned to discover 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 recommend.
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 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 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 or interest and only continued paying the annual fee so I could receive the licensee newsletters.
A real estate license, and the responsibilities that come with it, have come a long way. In fact, 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 think “broker” is synonymous with “boss.”
For example, a friend from out of state called a multioffice 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 said. “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.”
According to real estate attorney Mike Spence, some state guidelines were changed and all real estate agents are now called brokers. If brokers have three years of experience and pass a test, they can become a “managing” broker and are qualified to supervise other brokers. Each office is required to appoint someone who has a “managing broker’s” license to be the “designated broker,” who is the person in charge of the company.
What makes the industry confusing for the consumer are the responsibilities defined under “real estate agency” that impose duties for all licensees involved in any deal.
Those duties are heightened when a licensee is representing their client and include that the broker be loyal to the client, that they disclose any conflicts of interest in a timely manner and that they advise their client to seek expert advice if called for. They are also not to disclose confidential information and to make a good faith and continuous effort to fulfill the purpose of the agency.
“So when a real estate broker is … say, watching a high school basketball game with a friend, they’re a licensee,” Spence wrote. “But when they’re working for a client, they become agents of that client. So for purposes of licensing law, they’re all brokers, but when they’re out in the field working, they’re either licensees or agents, depending on what they’re doing.”
Spence said he has been pestering multiple listing services and the National Association of Realtors for years to further clarify all of the conditions and terms related to agency.
Separate and independent of the agency issue is the fact that not all licensees are Realtors. Only members of the National Association of Realtors are Realtors.
So when you ask a friend at work, church or school for a good real estate professional to sell your home, you probably mean “broker” even though you say “agent” or “Realtor.” But not completely.
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:
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
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