The novel coronavirus (COVID-19) outbreak has disrupted nearly every facet of life in California, and the real estate industry is no exception. Social distancing guidelines meant to slow the spread of the disease have also slowed incomes — to a stop, in many cases. With thousands of agents and brokers suddenly unable to work, is the California Department of Real Estate (DRE) adequately prepared to support its exam applicants, licensees and the public?

The new normal

The global pandemic has become a make-or-break moment for local and world leaders alike. Californians are watching closely as some leaders spring into action and others flounder.

To slow the spread of COVID-19, California Governor Gavin Newsom issued Executive Order N-33-20 on March 19, 2020, directing California’s nearly 40 million residents to shelter in place. It stipulates that residents may only leave their homes for essential activities, such as picking up medicine, grocery shopping and getting physical exercise (provided residents adhere to physical distancing guidelines).

Likewise, businesses are also “sheltering in place” to combat the spread of COVID-19.  Only businesses providing essential services will remain open, including:

  • banks;
  • laundry services;
  • grocery stores;
  • restaurants (take-out and delivery only, no dine-in service);
  • pharmacies;
  • gas stations; and
  • essential government functions, like law enforcement.

But one painful tradeoff of the Governor’s life-saving order is that businesses deemed “non-essential” may not reopen their doors until the shelter-in-place order has been lifted. Seemingly overnight, thousands of agents and brokers saw their incomes evaporate. Real estate practice relies heavily on face-to-face meetings, with sellers, buyers, third parties and other staff at the office. As the old truism holds, real estate is touchy-feely – a concept that has become suddenly taboo in the pandemic world we now occupy.

Adapting to change

Unable to perform open houses, some real estate offices are turning to technology as a stopgap to continue showing homes, through virtual tours. Increasingly sophisticated virtual tours allow potential buyers to view detailed 3D renderings of properties online, so as not to break social distancing guidelines. Tech-savvy brokerages who have already adopted this technology and worked it into their business models maintain the upper hand for now.

How and when agents will be able to return to business as usual is unclear. The U.S. Department of Homeland Security Cybersecurity and Infrastructure Security Agency (CISA) updated its list of essential services to include residential and commercial real estate. However, the most recent guidance from the State Public Health Officer excludes real estate providers. The statewide rules pass the buck to local governments, so agents will need to check with their local guidance for information on what is allowed. Further, those returning to work need to continue following California’s COVID-19 health protocols, so open houses are still prohibited.

Related article:

California’s definition of “essential service” has shifted for real estate professionals

Home tours are only a small piece of the puzzle. The economic gridlock caused by the pandemic is unsustainable, and experts expect it to last for several months even after the Governor’s executive order. But Californians are made of stern stuff; we persevere, adapt and innovate in a crisis.

Unless you’re the DRE, that is.

Follow the leader

How much can Californians reasonably rely on the DRE to support the real estate industry through the global pandemic and ensuing recession? So far, their reaction has underwhelmed frustrated real estate professionals.

To its credit, the DRE has heeded Newsom’s shelter-in-place order and closed all offices to the public until further notice. Like many California businesses, much of the DRE staff is working remotely. The Department continues to operate, and exam applicants, licensees and members of the public can still contact them through its usual channels:

  • by mail, at 1651 Exposition Blvd, Sacramento, CA 95815;
  • by phone, at 877-373-4542; and
  • online through the eLicensing website.

The DRE’s phone line presents a purgatorial wait in the best of times, so callers can expect hellacious queues during a global pandemic. As such, the DRE has temporarily opened a new “Ask DRE Licensing” program in which they answer licensing questions via email. Simply email your question to to receive a response within 48 hours.

One caveat: this new program can only answer general licensing questions. While a welcome innovation, Ask DRE Licensing will not be able to comment on the status of individual applications. But registering a new email address is where the innovation ends.

Down and out

The DRE has cancelled all real estate agent and broker licensing exams through April 30, 2020 (extending the previous April 7th date). Licensing exams constitute large gatherings, with examinees, proctors and other exam officials attending in person. Unfortunately for aspiring agents and brokers, the Department does not have the ability to conduct licensing exams remotely.

Editor’s note — The DRE is administering exams again in small groups of 10 beginning May 1, 2020. As of this writing, the DRE’s Current Exams page shows the next earliest exam date available in June 2020 at a single Sacramento location. Because of the reduced exam class size (presumably to comply with physical distancing guidelines), availability is extremely limited. For all but a lucky few, DRE exams are effectively still cancelled.

If the extent of the DRE’s tech-savviness is opening a new email address for questions, then they certainly don’t have the wherewithal to quickly erect an online examination system in the middle of a global economic crisis. Instead of looking to the future of education technology, the DRE has bet its chips on old-fashioned in-person exams.

The Governor’s office maintains COVID-19 will likely disrupt business in California far beyond April. If the DRE is to continue complying with the Governor’s shelter-in-place order, the exam reopening date will need to be extended. The DRE’s sloth is cutting off the real estate industry’s lifeblood: new agents.

Nevertheless, the DRE is still accepting new agent and broker license applications. Applicants whose exams were cancelled can reschedule for free through the eLicensing website.

The DRE is also still processing renewal applications. If your license is set to expire during the period identified in Newsom’s stay-at-home order, you have been granted a 60-day extension to submit your application, fee and continuing education requirements. For more information on the DRE’s functionality during the crisis, visit their COVID-19 Information page.

If there’s a silver lining here, it’s that the DRE still has the opportunity to change. After a nearly two-year vacancy in the post of California Real Estate Commissioner, Governor Gavin Newsom recently appointed Doug McCauley to the position. While the DRE has floundered in its two years under acting commissioner Daniel Sandri before him, McCauley has the chance to modernize the Department and develop a more proactive role in the real estate industry, no more sorely needed than now.

Looking ahead

With no clear end in sight, real estate brokerages will need to prepare for a dearth of new agents in 2020 and beyond. Stay-at-home orders may even discourage existing agents to forgo their license renewal. The $245 agent and $300 broker renewal fee may prove too steep for licensees suddenly cut off from their income for the foreseeable future.

Without concessions from the DRE to make licensing and renewals more accessible during the crisis, there may be too few agents to go around in the near future. How are California’s real estate professionals to adapt and stay solvent?

Brokerages can still count on a blast from the past to shore up business during the crisis: finders. Licensed brokers and salespersons can employ aspiring agents as finders during the licensing blackout since finders are not controlled by DRE law and regulations. Learn more about employing this strategy in your office.

The COVID-19 pandemic is only the tip of the iceberg; the 2020 recession looms larger still. Prepare for the harsh real estate market ahead with these strategies for surviving the economic trifecta situation of a recession, pandemic and financial crash.

Editor’s note — in this “new normal,” regulations change at break-neck speed. Bookmark first tuesday’s Recession 2020 resource page to keep your brokerage ahead of the headlines.

Agents — what can new DRE Commissioner McCauley do to support licensees? Leave your thoughts in the comments below.