CALIFORNIA REAL ESTATE UPDATE #10

Trials and Tribulations of the First Four Years of Licensees and How You Can Help Your Associates

Based on the phone calls and emails that our office receives, there is confusion in the ranks of California Real Estate licensees concerning the education requirements during a salesperson's first four years of licensure. Currently, to apply for a test date with the DRE for an original sales license, an applicant must show completion of a College Level Principles Course and two other acceptable College Level Real Estate Courses. The only people who do not have to meet this requirement are members of any State Bar. A Member of a State Bar can "sit" for the Brokers Exam without any further discussion.

You might disagree with my previous statement and say that an applicant only has to complete a Principles Course to take the State Test. That is true. However, when someone passes the Salespersons test after completing only the Principles Course they are given a "Conditional License". During the next 18 months, "Conditional Licensees" must complete the two additional College Level Courses or their license is suspended and they can not work anymore. If the two transcripts are not submitted within four years after the original issuance date, the license will not be renewed and the salesperson will have to pass the State Exam again. (There is no two year grace period on Conditional License renewals).

In addition to this requirement, salespersons in their first four years of licensure must pass four three-hour mandated courses of Agency, Ethics, Trust Funds Handling and Fair Housing. Many "veteran" licensees keep telling first-time renewers that they need 45 hours of DRE education to renew, and they are incorrect.

Another problem is that the rookies think that the conversion of a conditional license to a regular license at the 18 month period is a renewal and at the four year period they believe that they are doing a "second renewal" and that is what they tell the sponsors when they purchase renewal courses. You would be amazed at how many "first time renewers" buy and complete the wrong course. This obviously costs them time and money.

What do I recommend and what should you "pros" recommend to license prospects? Tell them to complete all three courses when the are thinking of applying for a license. This will allow them to get an original license and their application and licensing fees are smaller. There are extra fees for processing a "conditional license".

I even have a recommendation on which two course to take. Their two additional courses should be Appraisal and Finance. These are the two sections in the sales exam that are failed the most. If a person completes them with a good grade, they have a better chance of passing the State Exam the first time, saving money and time, and they don't have to worry about an 18 month requirement. As a broker, you don't have to keep tabs on whether they are still eligible to work after 18 months.

One responsible broker complained to our office that our Web site doesn't stress enough to "conditional licensees" that they must allow over five weeks to pass the two additional College Courses. So I am stressing this to you now, and our Web site stresses this in many instances. Even if a person could pass the tests immediately, there is a DRE regulation that 2 1/2 weeks (18 days) must pass between the receipt of course materials by the student and a test date on the courses. A student has to allow for shipping time, monitoring time and mailing time of the transcripts to the DRE. You would be amazed as to how many producing licensees forget these facts. If a licensee wants to complete these courses live at a community college, they have to allow two semesters to complete them. That requires pre-planning and most licensees don't plan.

(One day a licensee complained about this DRE rule and maligned one of my registrars and had to speak to "someone in charge". I spoke with her and she complained that she was so busy, busy, busy and I didn't realize how successful she was and she didn't have time for these stupid Mickey Mouse idiot courses. No time at all. I asked her "When does your 18 months end" She said. "In two days". I told her to wait two days and she would have a lot of time because she would not be able to work until she finished them.)

Another education story. A licensee called my office and asked "What courses do I need as I have had my sales license four years". Correctly, my staff sold her the four mandated courses and she completed them and mailed them to DRE just at her four year renewal time. She was told by DRE that she hadn't submitted her two college courses at the 18 month benchmark and now she would have to retake the exams. She never told my staff this fact and I guess she had never told her broker because she had been working on a suspended license for 30 months. To further complicate the problem, she was the wife of a State Assemblyman who was at the DRE office within minutes of her license revocation.

So to all you brokers, relatives, mentors, etc., know this one aspect of licensing so your associates never have any of these problems. Any questions? Call our office at once as we have researched these regulations closely and with no humility, we know more about them than any training director, Association staff, CAR, or the clerks you get at the DRE.

Our Solution to Topic One

Again we recommend that your prospects take the three courses beforehand. If anyone you know is applying to take the State Exam, ask them if they have ever taken any courses in college or community college such as Economics, Business Law or Accounting. No matter how long ago they were taken, they should get transcripts and send them in with their application. They would not have to go through the Conditional License process.

We now have the course materials for the four renewal courses on our Web site so that a first time renewer can do complete their requirements on the Internet. They email their registration and credit card number to our office. They receive a username so they can read the material on our Web site. After one day passes, they can request a password to take the four 25 question true-false exams. (They now have to answer only 60% correctly). Then, they can print their certificates on their printer and renew their license.

We have an "Autumn Sale" right now and the entire process cost only $39.00. Sign up now.

FAX.com, etc. Update

In a previous newsletter, I mentioned the $6 trillion law suit against Fax.com. Fax.com stated that they relied on a California fax law that was not as restrictive as a Federal Law that had been declared unenforceable by some Federal Courts.

Now, three new bills have been signed by Governor Davis.

Another newspaper article stated that the California legislature is going to pass new regulations concerning email spamming. It is starting to look like we will only be able to talk to prospects live and in person.

Before my next newsletter, I will research these three new Acts and other proposed Acts. Stayed tuned.

"New" CAR Deposit Receipt

In a previous newsletter I stated that CAR had set an October 1st date for a change in their Deposit Receipt Form. The two forms used for the past couple years were to be combined into one and this would probably mean some changes for Southern California Realtors.

These changes had gone through task forces, committees, staff reviews, etc. At the last moment, many complaints were received from prominent Southern California Realtors. I just read a new pronouncement that CAR would continue to print two forms. So forget my previous newsletter. (P.S. I wonder how the people who worked so long on these proposed changes feel about the last minute reversal).

A tip for Realtors. Get a copy of the new form and study it. Even if you don't use it, you will probably be getting offers from brokers using the new form.

CLOSING THOUGHTS

I hope that you didn't own a lot of Homestore stock. NAR has such a great record in this field, First, they lost millions of our money on something called RIN (Realtor Internet Network) and they worked with Homestore and gave them all of our listings. (I wonder if any NAR staff and leadership who so strongly backed Homestore has any second feelings for Realtors who bought Homestore at $132.00 per share and now own it at 14 cents).

On an aside, NAR licensed a company to process the E-Pro designation. That company is nowhere to be found. Now, NAR has given this function to Internet Crusade. Finally, they have selected an Internet company that has a Real Estate background and I would wager that the Crusade won't disappear into the night.

The next time NAR leadership recommends any Internet Company, I would hope that I have some money to "short the stock". Incidentally, there is an outstanding article recently in RealtyTimes.com about WhereToLive.com. Their headline says that maybe the company should be called "WhereToHide.com".

SECOND CLOSING THOUGHTS

If you have any comments or suggestions, please send me an email, fax, phone message or letter. I won't consider anything from you as spam. By the way, keep an eye on Notice of Default and Loan Delinquency Rates. Nationally, these rates are at 20 year highs. (Too many low down payment sales and easy to acquire Home Equity Loans).

Perhaps, it is time to start restudying Short Sales, Trustee Sales, REO's, Syndications and Equity Sharing. What do you think?

By the way, it would be my pleasure to give a seminar in your area soon. Call and we'll schedule something.

Renewal and Licensing Information

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