Dropping out isn't an option

WHEN career real estate professionals go to school, they never graduate.

That's because from the time they apply for a license right up until retirement, learning more about what they do is part of the job.

As is the case for many professions, education is a primary prerequisite to obtaining a real estate license in California. And every four years, before realty salespeople can renew their license, continuing education remains a key requirement.

Between license renewals, real estate professionals who thrive in the fiercely competitive industry often go beyond legally mandated lessons and spend even more time learning the ropes.

"If we are going to be competitive and have a viable career, there isn't an option to gaining more education. What we've seen is that those agents who have gone out and sought additional education show an increase in productivity and efficiency and an increase in the positive response we get back from clientele" said Robert J. Bailey, president of the California Association of Realtors.

Schooling necessary to obtain a license is designed largely to keep agents abreast of the latest changes in the law -- virtually always an annual event especially when local ordinances and federal laws are in the mix.

"Last year, the California Association of Realtors (CAR) tracked 1,469 different bills that had some component related to real estate," said Robert J. Bailey, CAR president and broker owner of the three-office Bailey Properties in Santa Cruz.

And then there's California's volatile real estate market of sudden swings and unexpected turns -- a no man's land for agents who aren't quick on their feet.

"A lot of people have the perception that this is an easy business. About 13 percent of the agents make 90 percent of the money. An old rule of thumb says the length of a career is three years. For every new one coming in there's one already in and one going out. It isn't an easy business," said Stephen J. Hanleigh, president of the Santa Clara County Association of Realtors.

Basic training

A conditional license to practice commercial or residential real estate requires an aspiring real estate agent to complete one accredited three semester-unit or one four quarter-unit college-level course in real estate principles and later correctly answer 70 percent of the questions on a three-hour multiple-choice examination, according to the California Department of Real Estate.

To obtain the full license, the applicant must within 18 months of passing the test, complete two additional accredited three semester-unit or two four quarter-unit college-level courses from among a variety of sub disciplines including, real estate practices, appraisals, property management, finance, economics, law, office administration, accounting, escrows, mortgage lending and computer applications.

After obtaining a license, real estate salespeople can begin practicing only under the supervision of a real estate broker -- who must have still more education.

To become a broker, the licensed salesperson first must document a minimum of two years, full time, broker-supervised work within the last five years or show proof of a four-year degree in real estate or law or he or she must be a member of a bar association. Equivalent work experience as an escrow or title officer, loan officer or underwriter, subdivider, contractor, builder, appraisers may be accepted in lieu of two year's experience working with a real estate broker, according to the state's real estate department.

In addition to the work experience, broker applicants must also complete college level courses in each of real estate practice, law, finance, appraising and economics or general accounting and take an additional three courses from a list that includes real estate principles, business law, property management, escrow, office administration, mortgage lending, advanced law, advanced finance, advanced appraising, and computer applications in real estate.

After hitting the books, prospective brokers are tested for five hours in an exam he or she must pass by correctly answering a minimum of at least 75 percent of the multiple choice questions.

To hold onto either a broker's or salesperson's license after the first four years, the realty professional must complete 45 clock hours of real estate department-approved continuing education -- 12 hours in ethics, agency, trust funds and fair housing, 18 hours in consumer protection studies and 15 hours in consumer service or consumer protection. Subsequent license renewals come with similar continuing education requirements.

"As consumer protection has become a more visible requirement in society, the public expects more and you need to exhibit a higher level of performance and that can only be achieved by more knowledge and a better understanding," said Mr. Hanleigh, also broker-owner of Realty Center in San Jose.

Licensing exams aren't easy, but they don't indicate real-world experience. New licensees don't have to prove they can shop for the best loan, find the best home or building or negotiate for the client.

"It's (licensing requirements) general knowledge, but if you gain more specialized knowledge you have more credibility with your client," said Mr. Hanleigh.

That specialized knowledge is available in the form of coveted professional designations and certifications sanctioned by the National Association of Realtors (NAR).

Advanced individual training

A designation goes to those who reveal strong skills in an area of real estate while certifications are more specific skill sets, which often can be used to obtain a designation, said Dan Schmitz, manager of online educations for the Graduate Realtors Institute (GRI). The national institute grants "GRIs", often the first special designation realty professionals seek.

Over a period of five years GRI recipients must pass 14 courses in subjects including marketing, financing and managing investment properties; investment property analysis; environmental concerns; technology applications and real property, tax and exchanging.

The credibility GRI and other such designations bestow upon holders often translates into a more lucrative career.

"Results from surveys show that Realtors with GRI designations earn $18,000 more annually than non-designated Realtors, because they can provide a higher level of service to clients," said Schmitz.

Designations are also available to commercial real estate salespeople.

"What it means is that you are dealing with someone who has been in business for a while and has performed at a certain level in the industry. This is typically a seasoned professional, " said Dave Sandlin, a senior vice president at Colliers International in San Jose and holder of the commercial real estate's Specialist of Industrial and Office Real Estate (SIOR) designation.

"There are about 2,000 (commercial real estate) professionals in this market place and there's about 28 people here who are SIOR's," said Sandlin.

SIOR designates a commercial real estate professional with special education and experience in sales and leasing, primarily office and industrial space. Another commercial designation is the Certified Commercial Investment Member or CCIM, a top investment specialist with skills in evaluating and selling real estate investment properties.

Other residential designations include: Certified Residential Specialists (CRS), for salespeople who reach certain sales levels and skills in listing properties, selling, and investing, as well as mortgage financing and computer applications; the similar Accredited Buyer Representative (ABR) has high sales numbers working only as a buyer's representative; and Certified International Property Specialists (CIPS) who achieve required international sales experience.

Special certifications include the new e-Pro certification for salespeople who complete an online course in technology use in business and the At Home with Diversity Certification (AHWD), an educational initiative designed to sensitize agents to diversity among real estate consumers.

Agents and brokers who may not have NAR-sanctioned designations and certifications may be just as experienced, thanks to designations from other industry trade groups and special in-house training programs that come with requirements just as grueling as the NAR brands.

The San Diego-based National Association of Hispanic Real Estate Professionals (NAHREP), for example, offers a NAHREP Certified Professional (NCP) designation for real estate agents and mortgage originators who work in the Hispanic community and want to better understand Hispanic culture as it relates to home buying and selling. The designation also includes lessons in new technologies and mortgage products for home buyers, especially first-time home buyers.

"I think when someone is interviewing an agent in today's market place, they want first to have someone they can trust, second is the level of success in the market place, the track record, but they also want to know what is that person doing to enhance their professional level," said Mr. Bailey.

"Is that necessarily a national designation? No. It could be independent seminars and market meetings. I wouldn't want to take away the benefit Realtors are getting from the infinite number of seminars and other educational opportunities," he added.

Designate this

HERE'S A LIST of the professional designations and certifications recognized by National Association of Realtors affiliates.

Accredited Buyer Representatives (ABR) and Accredited Buyer Representative Managers (ABRMSM) have excelled at representing buyers.

Accredited Land Consultants (ALC) specialize in the sale of subdivision developments, urban and investment land, farm and ranch sales.

Accredited Residential Managers (ARM) and Certified Property Mangers (CPM) have advanced in on-site residential property management.

At Home with Diversity (AHWD) certified agents have completed special training in diversity and cultural issues.

e-Pro certified agents have been educated online in technology skills related to real estate transactions.

Certified Commercial Investment Members (CCIM) are expert in commercial real estate brokerage, leasing, asset management, valuation and investment analysis.

Certified International Property Specialists (CIPS) are trained in international transactions.

Certified Real Estate Brokerage Managers (CRB) have brokerage management skills beyond those of typical brokers.

Counselor of Real Estate (CRE) designated agents provide objective real estate advice to investors, builders and financial institutions.

Certified Residential Specialists (CRS) have extra training in listing properties, selling, investing, mortgage financing and computer applications.

General Accredited Appraisers (GAA) and Residential Accredited Appraisers (RAA) are state certified appraisers with additional hours in experience and education.

Graduate, Realtor Institute (GRI), are graduates of a trade institute of higher realty education.

Realtor Association Certified Executives (RCE) have extra skills in realty association management.

Leadership Training Graduates (LTG) is a designation for women agents who've achieved greater professional development.

Referral and Relocation Certification (RRC) recipients typically are women skilled in logistics for corporate relocation business.

Specialists of Industrial and Office Real Estate (SIOR) are commercial real estate agents with higher levels of education, work experience and sales.

NAR offers a complete list of real estate designations and certifications online.