I am reading Peter Eavis’ great article in FORTUNE Oh, the People You’ll Blame at The Newsroom on Robertson. I was getting a kick out of the number of fingers of blame when a loud, rather corpulent man, interrupted my wheatgrass – shouting into his cell phone….”Well you got me into this property…now…GET…ME….OUT!”
At his moment it occurs to me that the Real Estate Brokers have some culpability in the Real Estate mess and should be awarded several fingers. Here in Los Angeles, folks I know, who had great careers going in other fields, just got up and quit and got their Real Estate licenses faster than you can say “Daytrader.”
According to the California Department of Real Estate, “the number of Real Estate Licenses issued in 2005 soared to a record of more than 475,000 – a 14% increase over the previous year, and a 57% increase during the last 5 years.” With so many newly minted Real Estate Pros getting listings, property values had no place to go but up. My guess is that applications for Licenses peaked near the peak of the Property values.
To my knowledge, it takes a fee, a classroom/hourly requirement, and not too much more to become a Licensed Real Estate professional. And while this may qualify someone to know more than 80% of the general population, calling them Professionals at this stage would be like calling me Jeff Gordon a year after I passed my Learner’s Permit Road Test.
Brokers need property to sell and knowing there was easy money near, made the sales process much easier. The commissions Brokers are paid are based upon the closing price, regardless of how it’s financed. Peter Eavis did a great job of delineating the other charlatans. IMHO, I think the property owners are responsible for their milieu.
In the sales process, someone has to sell the dream of home ownership first. Financing comes next.
Herewith, I nominate the Real Estate Brokers of Los Angeles for 3 Fingers.