Saturday, May 06, 2006

Harder To Become A Hair Stylist In New Jersey

Ever wonder why it's more difficult to become a hair stylist than a real estate agent in New Jersey? So do I. Do New Jersey homebuyers even realize that their barber needed more hours of education than the person brokering a hundred thousand dollar transaction? Now, I'm not trying to say that cosmetology and hairstyling aren't difficult. Having received a bad haircut or two in my day, I'm glad with the licensure requirements where they are, it's the requirements for a real estate license that scare me.

The reason for licensing requirements are twofold. First, to ensure that the applicant has had appropriate training in the profession, and second to provide a barrier to entry. Why would you want a barrier to entry? It's simply, it provides a level of consumer protection by ensuring the candidate is serious about the profession.

So is it harder to become a hair stylist or a real estate agent/broker in NJ? Let's explore.

Cosmetology and Hairstyling Licensing Requirements

Real Estate Licensing Requirements(PDF)

Age
Hair Stylist: 17 years
Real Estate Agent/Broker: 18 years

Education
Hair Stylist: High School or Equivalent
Real Estate Agent/Broker: High School or Equivalent

Prelicensure Training
Hair Stylist: 1200 Hours
Real Estate Agent: 75 Hour Course
Real Estate Broker: 150 Hours

State Licensing Exam Passing Grade
Hair Stylist: 75
Real Estate Agent/Broker: 70

Required Apprenticeship
To operate a Beauty Shop: 3 years as a licensed cosmetologist
To become a Real Estate Broker: 3 years as a licensed agent


Can someone please explain to me why it's more difficult to become a hair stylist in New Jersey? Again, I'm not trying to downplay cosmetology at all, I just don't understand why Real Estate Licensees are held to lower standards, yet they are permitted to participate in transactions of such magnitude. Next time you get a hair cut, sit comfortable and take confidence in the training of your service provider.

If the real estate industry is permitted to keep propogating the meme that real estate is an investment, than agents and brokers of those transactions should be held to the same high standards of other investment and financial professionals.

Proposed Real Estate Licensing Requirements
Bachelors Degree in Business
1,200 Hours of pre-licensure real estate education
1-year apprenticeship prior to agent licensure

At least the commission paid would be justified.

Caveat Emptor!
Grim

24 Comments:

Anonymous Anonymous said...

THE WHOLE RE INDUSTRY IS TAINTED WITH UNETHICAL GREEDY ACTIVITY.

LET REALTORS STARVE...BA BA BA BA BA BA BA BOYCOTT HOUSES!!!!!!

Tough times bring out the best in most.

Pa pa pa pa pa pa pa PANIC coming soon.

BOOOOOOOYAAAAAAAAAA

Bob

5/06/2006 07:08:00 AM  
Blogger jhawk92 said...

reminds me of the internet boom...people couldn't get MS certified fast enough...glut of "techies"...then the bottom dropped out and they ran to RE market...

I have a perfect example in my neighborhood...a little company started out as tech recruiting company, then switched to real estate around early, mid-2001! Just painted over the technology part of their sign and put in Real Estate (not a joke).

I guess they will become a commodity trading firm next if that also doesn't really require any experience and has loose licensing requirements..

5/06/2006 07:24:00 AM  
Anonymous Anonymous said...

Well, no one wants a bad hair day, that is just disastrous....On the other hand, if you have a bad house day, your realtor will gladly sell the eye sore, find you another one and scam you out of a year salary. “Ya know, with house prices climbing”... it's a great idea! Don't want to move? Why not refinance and fix that ugly house! Once payments increase you'll never be able to afford to have your hair done again! No brains needed here!

5/06/2006 08:13:00 AM  
Anonymous WillyBoy said...

Rather than raise the requirements to be a real estate salesperson, I think the requirements should be lowered.

And as to the standard to which they should be held, I wonder if they really meet any standard at all in reality. Why not just remove all standards and let the average person see it for what it really is: the real estate agent is simply a sales person looking to make a sale and a commission. The real estate salesperson only gets paid if they make a sale; therefore completing the transaction (making the sale) is much more important than whether the transaction is in the best interests of the client. The real estate agent's self interest can't help but trump protecting the client's interest. In stating this, my purpose is not to personally attack anyone who happens to be a real estate agent. I'm sure there are as many people of high moral integrity in the real estate profession as any other profession. But it is simply unrealistic to think that a real estate agent, who only gets paid if a sale is made, would have any of the following as a top priority:

1. advising prospective clients that the market is overheated and now is not the time to buy.

2. advising that certain types of financing that will allow the buyer to get into the house, are nevertheless not in the buyer's best interest.

3. all other things being equal, to get the seller the best (highest) price for their house; or to get the buyer the best (lowest) price for their selected house.

Therefore, why have standards at all for a sales person. At least this way, the general public will come to recognize that there is no fiduciary duty and that nobody is looking out for them.

5/06/2006 08:21:00 AM  
Anonymous Anonymous said...

I'm a (licensed!) architect and agree with Willyboy- lets drop the pretense of realtors having any interest other than completion of sale and make it easier for anyone to enjoy the sport. Its an insult to the process of licensing (and the health-safety implications therein) that RE "professionals" could ever have the same ethical concerns- withness their complicity in the negative amortization loans of the past few years. Is there any substantial difference between the RE broker and a used car salesperson?

5/06/2006 08:40:00 AM  
Anonymous Anonymous said...

I agree with Willy & Anon, drop the bogus requirements and let the market decide.

Isn't it usually better to use a real estate attorney for many of the tasks related to the purchase/sale/contract?

5/06/2006 08:46:00 AM  
Anonymous Anonymous said...

Bob you are beginning to talk some sense. good for you. For sure you are not an underage teenager.

5/06/2006 09:00:00 AM  
Blogger Shailesh Gala said...

US has one of the largest commissions in the world. 4% to 6% is really high considering amount of value add that is done in selling. I have read that most developed EU countries commissions are about 2%. This was about the same in India where I grew up.

So far, Technology has been able to effect many commission based industries such as stock trading, travel agents etc... But RE has still been the bastion.

5/06/2006 09:21:00 AM  
Anonymous Anonymous said...

Some of you know there are Realtors on Board
You’ve even heard it from me first hand
And although I know, that we are not Adored
A whole piece putting us down? Was that planned?

Oh Grim how could you do this to us ?
We give you the inside scoop
I can’t imagine what kind of fuss,
and taunts we will get from this group

I check this blog like I check my mail
But today I will think twice
I know in my head without fail
No-one is gonna be nice !

Today Everyone will be chanting there Boos
So Booya BOB please give me a break
Try to work an open house in my shoes
There’s only so much I can take ) - :

I will check back, but not as often today
Unless you can all,just watch what you say !

The Anonymous Realtor

KL

5/06/2006 12:47:00 PM  
Anonymous Anonymous said...

Grim,

That's a bit overstated.
The majority of people who go into real estate, especially those who have gone into it just recently, are simply trying to ride the bandwagon.

There are brokers, such as my mother for example, who have been in real estate for almost 2 decades and have seen not only ups, but also downs in the market and know how to deal with both situations. It's a people profession, and requires skilled interaction. Maybe not a hard thing to do in a hot market, but when the market turns cold and you are trying to sell, an experienced broker comes in quite handy.

So, when calculating the number of hours of training required - realize that experience is important, and it takes far more to become an experienced broker.

5/06/2006 12:51:00 PM  
Blogger rymingrealtor said...

I've taken an identity, here's hoping I remember it

KL

5/06/2006 12:51:00 PM  
Anonymous Anonymous said...

you should see how much it takes to become an agent in NY! It's only a 45 hour course and you can take the test. The course only covers the legal requirements and nothing about how to sell a house or ethics. At least NJ requires much more class time and a course on ethics.

I do think you're over simplifying the comparison between hairstyling and real estate. The Real estate buying/selling process is heavily regulated legally. It's actually very simple and I'm not sure why there is even a need for agents at all. There is a lot of room for unethical behavior though, I will admit that. It's too bad people have to stoop to such low levels for a buck. BUT not everyone is unethical, I've met a number of real estate agents that are very honest and up front.

I have bought/sold real estate a few times. After you've bought or sold a couple of times, you realize it's not that difficult, you just have to be careful and very thorough.

5/06/2006 02:02:00 PM  
Anonymous shaoyu said...

Shouldn't realtors work similarly to car mechanics? In my opinion a fixed rate hour labor works way better for customer's benefit:

Realtor Mr. Honesty
hour rate $100

100 Integrity Road:
history report 3 hours;
site inspection 2 hours;
structural inspection 4 hours;
hazard and insurance report 3 hours;
etc. etc.
Then the sellers would be more serious too.

5/06/2006 03:38:00 PM  
Blogger grim said...

KL,

I didn't mean to offend anyone, just open some eyes about licensure requirements. I'd rather that buyers asked prospective agents about their qualifications and how long they've been in the profession.

You know as well as I, that there has been an incredible influx of new licensees. Many of these folks saw it as a path to easy money. These aren't the kind of people that put their clients best interests first.

I only know a handful of brokers and agents. Every one in the business for 20 years or more. Would I trust these people? Absolutely.

Not putting anyone down, unless you somehow think that cosmetology somehow isn't an honorable profession. My sister owned and operated a salon for many years. She was a highly successful small business owner.

jb

5/06/2006 07:42:00 PM  
Anonymous waiting said...

Great Post. An idea whose time has come. Too many realtors do not know the first thing about what they're doing.

Apparently, out here in Seattle, some do not even know what the different MLS listing categories actually mean.

Hard to believe, but I've asked and they can't answer the questions. Total numbskulls.

That would be fine, except they PRETEND to be so savvy and knowledgeable.

If they'd drop the pretense, I wouldn't care how dumb they were.

5/06/2006 08:01:00 PM  
Blogger rymingrealtor said...

"I didn't mean to offend anyone"

Grim don't worry I think your the best
I thought you'd know my rant was in Jest

KL

5/06/2006 09:08:00 PM  
Anonymous Robby Biggs said...

Well, in the midst of a massive real estate boom, all any freshly-minted "realtor" had to do was look pretty, smile a lot, unlock a few doors, and know how to operate a copy machine. In the midst of a slump, realtors and salespersons with actual skills and knowledge will survive and the bandwagoneers will go cut hair or run a nail salon back in Wayne or Denville or wherever.

5/07/2006 01:24:00 AM  
Blogger bubble disciple said...

Rymingrealtor,

You should use your rhyming talents in your MLS listing house descriptions - it might boost sales :-)

5/07/2006 01:58:00 AM  
Blogger Roadtripboy said...

The only addition I would make to your requirements, Grim, is that an MBA should be required in the event that a person does not have a BBA.

Personally, I believe that the real estate agent will go the way of the travel agent within the next 10 years. The internet will render this profession obsolete.

If you maintain your property and price it properly, there's no reason why a person should not be able to sell it without a realtor. I believe that properties basically sell themselves. The exceptions might be if an owner has let their property go to ruin then they might need the marketing expertise of a real estate professional. But given your post, there's no guarantee that that a typical RE agent will have that expertise.

Another poster recently compared RE agents to used car salespeople. Given my own experience with RE brokers, I second that comparison.

While I do believe that there are ethical & capable people in the RE industry, I think the low barrier to entry and the potentially high monetary rewards entice many less than ethical and/or capable individuals into the industry---to its detriment.

5/07/2006 02:29:00 AM  
Anonymous Rox said...

Unfortunately, even as an agent, I have to agree with most of what you said Grim.

The educational standards for this industry are pathetically low. I believe that the agents play a much bigger role in South Jersey than North Jersey. The majority of home buyers and sellers do not use an attorney during their transaction here in South Jersey, which means the agent has to handle everything. The licensing course doesn't even touch on half the issues we have to handle such has
-home inspection repairs/negotiations
-title issues
-mortgage/financing options and closing costs
-zoning/permits/township regulations

Just to state a few. All of which the agent has to oversee, none of which is taught thoroughly in the licensing course. Currently, it is all "on the job training", trial by fire so to speak. You miss something, you are smacked with a lawsuit.

A bachelor's degree in business would help, however it would not cover many of the issues we have to deal with. An educational standard, a real estate specific bachelor degree, that includes all aspects of a real estate transaction would be far more beneficial. (in this area anyway)

A 2-3 year apprenticeship would be more appropriate as well. Every transaction is different. Unless a new agent is being trained by an agent handling 40+ transactions a year, there is no way they will get the exposure they need to be able to handle the countless problems that may arise during a transaction.

However, that would require Brokers to pay a salary and probably benefits to their "trainees". Traditional brokers tend to LOVE new agents because they give them a very low split, (50 -50 or sometimes less) and they are making much more on the new agents than the established/experienced agents. The broker's profit margin soars on what a new agent produces, at no expense to them. In a traditional broker's eyes, why not flood the market with new agents fresh out of real estate school? Nothing to lose and everything to gain.

If that problem could be addressed, I believe it would dramatically improve the real estate industry.

5/07/2006 07:14:00 AM  
Anonymous Anonymous said...

At least you can talk to your hairdresser. Any info. you tell your realtor is sure to be used against you!

5/07/2006 03:38:00 PM  
Blogger minutesfromNYC said...

Yes the RE industry is chock full o' unethical people...which is why I decided to get my license for myself...and it was EASY!

I on the other hand have a day job, real estate is a hobby of mine. I must say, the future realtors who were in that class with me were only interested in commission.

I agree that a 4 year college degree should be required, and an ethics portion should be added. Maybe if a 4 yr degree was required, it would eliminate the people without skills.

5/08/2006 06:54:00 AM  
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