For the most part, all new real estate licensees have the same level of skill and technical knowledge as it relates to a real estate transaction. Some agents may have an edge because they have family in the real estate business or they have a prior career in sales. Others may have a background in finance or appraising that helps fill in the “holes” left by the pre-license education and testing. To obtain a salesperson license in Wisconsin, an applicant must satisfy education and exam requirements. The course is law, law and more law with a short introduction to valuing a property and little content related to sales, marketing, networking and any of the other necessary skills an agent will need to become successful.
After the education, the next step is the licensing exam, which again is law, law and more law. The standard that guides the Real Estate Examining Board when creating the mandatory curriculum and the mandatory exam is: “What does a day-one real estate licensee need to know?” The course content can be challenging; and the 140-question, four-hour exam is not easy, but passing the exam and receiving the license is just the beginning of the process. When considering what a new agent knows, a broker can review the number of questions from each content area on the salesperson licensing exam. For example, 32 questions on the exam cover agency, and only three questions cover valuing a property. Obviously, an agent needs to start with a complete understanding of the laws surrounding agency, ownership, fair housing, disclosure and contract drafting, but the “how to be an agent” education is not covered in the licensing course or tested on the licensing exam. “How to be an agent” comes from the agent’s firm.
Potential agents going through the pre-license class ask me a lot of questions. The questions can be divided into three general categories: How do I pass the test? How do I solve my — or my brother’s, cousin’s, mom’s — personal legal issues? How do I figure out which broker to work for? My answer to the last question is always the same: Every firm is different, and it is just as important for the agent to interview the broker as it is for the broker to interview the agent.
New potential agents need to know the rules, regulations and culture of your firm. Giving potential agents a clear and accurate picture of how the brokerage is run will allow both the brokerage and the potential agent to decide whether it will be a good fit. The time to clearly negotiate and set forth the relationship between the firm and the agent is at the outset of the affiliation. Comprehensive office policies, independent contractor agreements and compensation agreements will provide protection for both the firm and the agent when it comes to tax purposes, litigation, dispute resolution, commissions and other legal issues. Having inclusive written agreements regarding employment expectations will pave the way to a successful long-term relationship and will guide the process for termination of the relationship when the time comes.
Orientation programs
We all know that person who rarely feels nervous or uneasy about a new situation. Most of us, however, do feel some apprehension about a new setting. As a broker, providing an orientation program is one way to start turning an agent into your agent. Regardless of how you structure your orientation, be sure to discuss firm goals, how to access supervisors, to whom agents can turn for contract review, and the general internal operations of the organization. Orientation can be a one-on-one affair or conducted at intervals when there are enough new agents. A firm could combine the models and do a mini-orientation for each new agent and provide a larger, more in-depth orientation for a class of new agents. An orientation can provide the new agent a picture of how the firm as a whole operates as well as how the firm expects the specific agent to operate within the firm structure.
Orientation can provide new agents a chance to get to know each other as well as a chance for agents to meet the senior management and established agents within the firm. Introducing new agents to established agents is a great way to foster a mentoring environment within the firm. Conducting an orientation can be a great way to remind agents that they are all collectively working toward the success of the firm even if competing with each other individually for business. Some firms use orientation as another opportunity to assess agents’ skills by having agents conduct mock-client phone calls or complete contract documents for review. Early recognition of an agent’s struggle to fill out a listing contract or offer to purchase is much easier to correct and address than discovering it by way of a failed transaction or a lawsuit.
Creating a business plan and establishing sales goals are two important functions that can be addressed during an orientation. Setting clear expectations for agents early on in the relationship will help to minimize misunderstandings later. Providing agents a framework for success within the firm can also help the agent identify individual strengths that should be used and weaknesses to be addressed.
Regulating and delegating
The agent is well on his or her way to becoming your agent. Now is the time to make sure the brokerage firm is providing proper supervision for that agent according to state statutes and administrative code regulations. A brokerage firm is required by license law to provide written policies to agents regarding the handling of leases, listing contracts, offers to purchase and other transaction documents. According to the supervision rules in Wis. Admin. Code § REEB 17.08, the policy regarding transaction documents is technically the only written policy that must be provided. However, a comprehensive office policy also spells out the lines of authority and the process for dispute resolution and otherwise lays out the expectations and obligations of each of the parties. An agent should make sure to request a written copy of these policies and a written independent contractor agreement that delineates the compensation agreement, which is crucial if there are issues about the payment of commission post-termination. The Wisconsin REALTORS® Association Office Policy Manual Guide may be used as a template, which is available online at www.wra.org/officepolicymanual.
Supervising agents does not mean that the firm micromanages every move an agent makes. The firm leaders may recognize some agents as being natural leaders, teachers and coaches. The firm can maximize those talents by allocating and delegating management responsibilities. The brokerage firm may delegate the duty to supervise licensed agents to one or more supervising brokers. Delegation must be in writing and signed by or on behalf of the delegating broker, identify the duty delegated, and be signed by the supervising broker to whom the delegation is made. There is no standard form for written delegation of supervisory duties. Ultimately, the document used to identify the supervising brokers, their duties and the agents being supervised will be signed by someone on behalf of the firm and by the supervising broker. The form can be filed away but if there are any updates or modifications to the supervision assignments, the agents and affected brokers need to be notified and new signatures will be needed to acknowledge the new supervision arrangement.
Regardless of which broker is in charge of which agents, the delegation must be clear and in writing. Supervision also includes providing reasonable access to a supervising broker to consult on real estate practice issues. Agents should never be left “on their own” without the ability to consult with their supervisor.
Training programs
Becoming a good real estate agent follows the same process as many professions. The agent completes the education necessary to obtain the license but does not yet have the training necessary to apply it. Education, formal or otherwise, does not necessarily translate to making a good agent. It takes time, training and practice to take that knowledge and turn it into the skills necessary for success.
There are so many ways to provide training to agents or encourage agents to seek out training. A firm can sponsor an in-house training on networking, using technology, cultivating professionalism or ethics. A firm can encourage agents to seek out outside training through REALTOR® designations or certifications. Conventions can be an excellent way to obtain not only continuing education but also useful training provided at workshops. Conventions have the added bonus of allowing the attendees to network with the agents from other offices within the firm and with agents outside the firm. Attendees can discuss the sessions they attended and make new contacts. The firm may ask attendees to report back to the firm to discuss the sessions attended and even provide a mini-training for colleagues who were unable to attend.
The need to train agents is not just for newly licensed agents but all agents within a firm. Even experienced agents can benefit from training refreshers or introduction to new areas where the firm would like to see increased competence.
Regardless of whether you are looking at adding a new salesperson, a newly licensed broker or an already licensed agent who is new to your firm, all will need direction on how you want them to practice. Where does the direction come from? Firm training, designations, CE, seminars, conventions and peer mentoring can all be valuable sources for shaping your agents’ practices to reflect your goals and exceed your standards.
When deciding what to train on and how, the firm should solicit feedback from agents. Maybe there have been transactional issues such as providing a notice when an amendment was appropriate or leaving the hours blank in a bump clause. Those are crucial details in a transaction, and every agent should get them correct every time. Maybe agents want training on new technology or business planning. Maybe the firm wants to host a motivational training to kick off a new advertising campaign. Even if some topics, such as CE, elicit a few grumbles from your agents, it is always worth it to build on existing skills and knowledge to better prepare the agent for the next transaction.
Fostering agent success through good training and strong observation of ethical requirements can only increase the success of the brokerage firm. If a buyer or a seller has a negative experience with an agent, you can bet the buyer or seller is going to tell everyone about it. A tarnished reputation can quickly spread well beyond the individual agent and harm the firm. The reverse is also true. If a buyer or a seller has a great experience with your agent, they will likely recommend your agent and firm to their friends, family and colleagues. Training your agents well and providing ongoing opportunities for education and advancement will allow your firm and your agents to build respected and trusted reputations in your communities and networks.
New CE requirements
All licensees must complete the required 18 credit hours of CE. There is no longer an exemption from CE for newly licensed people during the biennium they first receive their license.
However, one type of individual will be exempt from the new requirements: a salesperson who receives a license after October 1 of the even year of the biennium will not be required to complete CE for that biennium. For example, if a salesperson receives his license on October 15, 2016, he would not be required to complete CE for the 2015-2016 CE biennium. Brokers do not receive any exemption.
Jennifer Lindsley is Staff Attorney and Director of Training for the WRA.