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Schools That Train Real Estate Agents Are Booming, Too

Schools That Train Real Estate Agents Are Booming, Too


Students at the Institute of Florida Real Estate Careers in Kissimmee, Fla., spend 63 hours studying for a real estate license. (Gregg Matthews for The New York Times)

By LOUISE STORY
Published: July 2, 2005

The Institute of Florida Real Estate Careers, based in Orlando, has 11 centers around the state but has still had to place students on its waiting list this year.

"The numbers are off the charts because of the really aggressive real estate market," the school's president, Richard Fryer, said.

As the real estate market booms, there has been a parallel boom in the real estate education industry. Hundreds of thousands of people have entered real estate in the last four years, hoping to grab a share of the big money moving in the industry. All of them had to take real estate courses to obtain state licenses.

About $800 million was spent last year on real estate education, estimated Stefan Swanepoel, chief executive of RealtyU, a private company that provides course materials for the schools. Although he did not have specific figures from prior years, he said spending on real estate courses had risen significantly in the last few years.

"It is one of the few industries out there where you can be almost guaranteed that if you pass the license exam, you'll get a job," said Ginny Shipe, chief executive of the Council of Real Estate Brokerage Managers, an industry association based in Chicago.

But even as the schools are making money, not all agents are finding real estate an easy path. While the number of properties on the market has soared, the most experienced brokers, with the deepest roots in their communities, are getting the majority of the listings.

Many new agents drop out within a year of entering the field, state real estate commissioners said. In Florida, Mr. Fryer said, about half of all people who obtain their real estate licenses do not renew them.

Mr. Fryer and officials at other schools say they warn their students that real estate requires long hours and hard work, often with low base salaries to start.

New agents say they found they had much to learn about the practical aspects of selling a house once on the job.



"People think it's easy to sell real estate," said Jone R. Sienkiewicz, executive director of the Real Estate Educators Association, a trade group of real estate schools. But, she said, "You have to put a lot of time into it, and have a big Rolodex."

State real estate commissions report that they have been seeing steadily increasing numbers of people taking the license exams. In California, about 3,000 people a month took the sales agent license test from 1997 to 2000. Numbers began to climb in 2001, and, in May of this year, 14,662 people took the exam. Only about half of those who take the test pass it, said Tom Pool, a spokesman for the California Department of Real Estate.

"There's no indication that the trend's going to slow down," Mr. Pool said.

From May 2004 to this May, California data shows, the number of licensed agents climbed by 39,831. That is just over 3,300 a month.

The Association of Real Estate License Law Officials, a group of officials from state real estate commissions, found that in 2004 there were at least 1.26 million sales agents, the typical starting position in real estate, with active licenses in the United States up from at least 980,000 four years ago.

In New York State, there are currently about 80,000 active sales agents, up from about 57,000 in 2000, roughly a 42 percent increase, according to an annual survey by the licensing association.

Rural states are also seeing a steep rise in real estate licenses. From 2000 to 2004, the number of active licensed sales agents in Idaho climbed about 46 percent.

For schools that offer real estate classes, the upturn is good news. The sales agent courses at Mr. Fryer's schools in Florida cost $399, an amount typical for such classes. The course is 63 hours - the number of hours required by Florida - and covers basic real estate principles.

Students can also take an additional exam-preparation course over a weekend for $169 and a math review for $49, the school's Web site says. Enrollment in prelicense courses is up 30 percent from last year, Mr. Fryer said, and the school is adding two more class locations to accommodate its 15,000 students.

In many states, schools that did not already offer introductory real estate courses have applied for state licenses to teach the courses. In the last two years, California has licensed 34 additional schools to offer real estate classes, bringing the total to 115 programs, not including colleges and community colleges in the state, Mr. Poole said.

Web sites for schools and online programs emphasize their pass rates for state exams, often offering money back if a student fails. Joe McClary, who manages online and correspondent course education certification for the real estate licensing association, said that the largest online real estate schools were increasing revenue by 40 percent to 60 percent a year.

Real estate school officials said students only demand courses that meet the minimum requirement for hours set by the states. Some said state legislatures should make the requirements steeper. "We only train what the requirements are," Mr. Swanepoel of RealtyU said. "The skill which an agent needs to sell a house is definitely much more than a license."

Several new sales agents agreed that their real estate courses should have been more in depth. The course "does not teach you how to go to work," said Kim Galloway, 47, a new sales agent in Winter Park, Fla., who took a course at a local real estate school. "I didn't know how to write a contract, do the paperwork."

Some universities offer real estate courses as part of degree programs, as well as in continuing education programs. But those courses often center more on the practice of real estate than on the material needed to pass the state exams.

"The fact is that the licensing exam has virtually nothing to do with the practice of real estate," said Susanne E. Cannon, an associate professor of finance and director of the Real Estate Center at DePaul University in Chicago. The exam, Ms. Cannon said, focuses on real estate laws and ethics rules.

"If you think about it from the state's perspective, this is the one chance they get to kind of put you on notice," she said. "The bad news is that they really aren't testing on all the things that might be useful in the business."

Some states have raised the standards for obtaining licenses. Connecticut doubled the length of required courses to 60 hours from 30 last fall, because a lot of students were not passing the licensing exam, said Richard M. Hurlburt, the director of the licensing division in the Connecticut Department of Consumer Protection.

Vermont, the one state that traditionally has not required agents to take real estate courses, will require those entering the field to take 40 hours of classes, beginning next year.

Many legislatures are hesitant to increase requirements because it could make it more difficult for minorities and less-wealthy people to enter real estate, said Wayne J. Thorburn, president of the licensing association and administrator of the Texas Real Estate Commission.

Schools and real estate commissioners predicted that the number of new agents - and courses being offered - would fall when the housing market slows.

"When the market adjusts, the numbers are going to adjust," Mr. Fryer said. "The people who are on the bottom half of the earning scale are going to suffer, and they'll find something else to do. But that's a normal ebb and tide in our business."


LINK: http://www.nytimes.com/2005/07/02/realestate/02school.html