10 Things I wish they taught in real estate school

My office has seen a slew of new agents join in the last 6 months.  I suspect it’s largely due to the heavy recruitment efforts of my fabulous branch manager – I just don’t believe that there are that many people out there just itching to become a Realtor right now.

This column was originally published on February 15, 2010.

Talking and working with these new agents got me thinking about my own experience in the principles of real estate course just 3 years ago.  I remember being told that only 10% of the students are still in the business after 2 years.  For my class, that average was spot on (3/32).  The biggest failure I see in training agents is a complete lack of practical education.  It’s great to spend 4 of your required 40 hours of training learning about metes and bounds (which, to this date, I have still never used), but so many basic skills are completely overlooked.  I’m a big supporter of raising the bar (#RTB), so, in no particular order, I’ve put together a short (and, I’m certain, incomplete) list of items that should be required for new agents.

Lead Generation

Wanna know why new agents fail?  Because they don’t know how to generate new business.  It’s all fine and well to make a new agent pay for the course, the test, their dues, their MLS fees, their sentri/supra/multac key charges, their office/desk fees, etc., but when it comes to actually generating business, fuhgeddaboutit!  Why are we expecting people to shell out thousands of dollars to become agents, but god forbid we actually teach them how to find business!  Teach a man to fish and you feed him for a lifetime, right?  New agents NEED to know how to actually generate business!  I understand some people take the test without any intent of becoming a Realtor, so for that minority I’d even be willing to see some kind of compromise:

How about creating an optional required add-on course taken after principles of real estate, within 3 months of getting your license?  We could include this sort of core business training and call it Realtor 101 (RE101), charge a few hundred dollars additional and give people a better chance to succeed.  If I became a barber, I’d need over 800 hours of training to get my license, just to have the right to charge for a haircut!  Why do I only need 40 hours training to charge someone for selling their biggest asset?

Current Loan Programs

Teaching the difference between conventional/203k/FHA/VA seems pretty standard right now, but there are so many additional options out there.  For instance, many local areas have seen huge support by way of foreclosure purchase assistance programs.  While learning every lender’s unique program would be nearly impossible, I think it should be required for new agents to at least learn the federally sponsored programs that are being used locally.

It’s a dis-service to agent and buyer if the agent doesn’t know their clients options.  When a buyer learns about a program they could have used after the fact, it makes the agent – and the industry in general – look bad.  Regardless of whether or not it’s true, it damages the industry’s attempt at transparency.

E-Pro Training

Let’s be honest.  I don’t think E-Pro is a terribly useful course.  The designation is nice on a resume, but I know too many E-Pro certified agents who don’t know how to use their own email.  If (some) E-Pro certified agents are not what you could consider “tech-savvy”, where does that leave the minimum standard of knowledge for a wet-behind-the-ears agent?

This business requires internet knowledge and training, period.  I’m not suggesting that E-Pro become required, but I think it’s necessary to incorporate some of that designations training into a more modern principles of real estate course.

MLS Usage

It never ceases to amaze me, but when I post up the latest market stats on my website, I ALWAYS get a new agent in my office wanting to know where I got my information.  It’s not hard folks, the information is right there on the MLS, all you need to do is download it!

Beyond that, I know several agents who don’t know how to set up automatic drip feeds for listings, don’t know how to add/modify search fields (you can search by waterfront table depth?!?), and don’t even understand all of the abbreviations that are used.  Knowing how to use the MLS is a must, so why isn’t training on it standard as well?

CAN-SPAM compliance

It’s difficult to comply with federal anti-spam laws if you don’t know what they are.  Ignorance is not immunity and most agents don’t even realize they’re exposing themselves to tens of thousands of dollars in liability simply because they don’t have an unsubscribe link in their mass mailings.  Teach it, learn it, move on.

Liability Limitation

Every agent should be set up as some sort of LLC or S-Corp.  Most don’t, and yet creating your own business entity is cheap and easy.  The peace of mind alone should be enough reason to do so, but if you don’t know any better, how can you hope to protect yourself from expensive litigation.  I’ve seen agents lose their OWN HOME because they we’re sued by an angry client and they had no corporate entity set up to shield their family from that sort of risk.

Red Flag Awareness

Haven’t we all been on the other side of a deal with a new agent, frustrated because closing falls through when some preventable issue torpedo’s the deal?  Everybody makes mistakes, but real estate is a complicated business with lots of things that can sink a contract.  Here’s how we do it:  Add it to RE101, teach people to do preliminary title searches, educate on things that can cause financing to fall through, explain how a short sale does (or doesn’t) work, and teach agents how to identify issues before they become deal-killers.

Business Planning

Another candidate for RE101.  Too many agents don’t even know what a business plan looks like, much less how to create one.  Give new agents business plan samples, explain what goes into creating one, and let them choose to take it or leave it at their discretion.  A little planning goes a long way, and a better understanding of how to create a successful business would certainly help create better agents

Market Analysis

I never understood why this wasn’t taught in the principles of real estate course itself.  The most valuable paperwork I got as a new agent actually came from an appraiser.  It was a valuation estimation sheet that they used for estimating how much improvements to a property were worth.  Knowing what the average value increase for 2 vs. 2.5 bathrooms?  Priceless.  Providing a new agent with the same powerful tools is cheap and easy, so why not do it and train agents on the mechanics of doing a market analysis?

Wrapping it Up

Obviously, none of these suggestions can replace anything currently being taught.  This is additional information, to supplement current minimum education.  Will it increase the required hours to get your license?  You Betcha!  Will it increase the cost of the course?  Yup!  Raising the minimum standards of training is neither cheap nor easy, but it provides a better service to the agents in the class, their future clients, and the face of the real estate industry in general.