Do you support the governor’s proposal that the DRE be absorbed into the DCA?
- Yes (54%, 169 Votes)
- No (46%, 145 Votes)
Total Voters: 314
California governor Jerry Brown has proposed the consolidation of the Department of Real Estate (DRE) into a bureau within the Department of Consumer Affairs (DCA), as outlined in his January 2012 budget proposal. In order to cut administrative costs and encourage efficiency, the DRE and other licensing departments would be absorbed into the DCA. The DCA exists primarily to license and oversee California’s professionals in all industries.
Other California departments involved in the consolidation proposal include the Office of Real Estate Appraisers (OREA) and the Structural Pest Control Board.
first tuesday take: The governor’s proposal would eliminate administrative redundancies and, for the DRE management, do more than just change the name on the door. The current real estate licensing scheme would not be diminished, but enhanced.
A change in management will likely improve the standards of conduct currently sanctioned but inadequately enforced by the DRE.
The DRE was established to police the competency of real estate licensees and enforce standards of conduct the public expects and deserves. However, it has evolved into a convoluted bureaucracy, which has consistently demonstrated an inability to penalize the bad actors in the real estate industry and protect homeowners from their unethical behavior. Of course, past DRE commissioners (and governors) have disagreed, seeing more in doing less. [For more information regarding real estate fraud and the DRE, see the December 2010 first tuesday article, Break the law, keep your license: real estate-related fraud and the DRE.]
The Legislative Analyst’s Office (LAO) has oft criticized the lack of education required of real estate licensees applying for their license. As evidenced by the un-tempered boom-time market which led to the crash of 2008, the disproportionate amount of client responsibility authorized for new real estate agents to undertake in relation to the small measure of education required to practice under that license generates gatekeepers with a malformed sense of ethical duty. Most have little ability to represent members of the public in the largest financial transactions of their lives.[For more information regarding the LAO criticism of DRE education requirements, see the December 2009 first tuesday article, DRE’s failure to oversee its licensees and protect consumers.]
Unsurprisingly, the DRE — with its vast history of appointing commissioners deeply rooted in California political circles — cannot adequately protect consumers without bending to the will of local trade unions. The last DRE Commissioner, Jeff Davi, served as the Director for the California Association of Realtors (CAR) before being appointed by Governor Schwarzenegger to oversee the DRE. CAR, the largest trade union in California, influences the DRE commissioner’s office to make a license less difficult to acquire in order to increase their member base, earn greater revenues and weaken enforcement against its members. [For more information regarding the DRE Commissioner’s resignation, see the May 2011 first tuesday article, California DRE commissioner resigns.]
In an effort to encourage real estate education reform and increase consumer protection, first tuesday supports elimination of the DRE Commissioner position along with the DRE’s consolidation. It is an irrelevant, titular bestowal for political purposes only; a clear contradiction to the real estate licensing scheme designed to produce well-educated licensees and screen them to protect the public from financial harm in real estate transactions. Without the DRE and its redundant figurehead, the DCA has room to establish reasonable education and practice requirements for real estate licensees similar to those enforced by the OREA.
The OREA has an initial trainee license requirement through which a newly licensed appraiser must be managed by an experienced appraiser in good standing. The experienced appraiser can only have three trainees under him at any time. Newly licensed sales agents need a two-year apprenticeship program requiring them to work alongside an experienced broker or agent before graduating into a “certified” sales agent status —an internship. [For more information about the failure of the current broker supervision scheme, see the December 2010 first tuesday article, The rabbit and the greyhound: DRE disciplinary action and broker supervision.]
Without an extensive re-work of the DRE’s licensing requirements and chain of command, real estate trade unions will continue to endorse their own members’ best interests which now means that consumer protection falls by the wayside. The governor’s proposal to eliminate irrelevant and politically oriented agencies is an idea worthy of support from the licensed gatekeepers of real estate dealings. Education and experience must be mandated and its quality controlled, free from the corruption natively inherent in every political agenda.
Re: “The Governor’s Budget Summary – 2012-2013” from Governor Jerry Brown
I agree with you Mike, mostly, but have arrived at a place where I want continuing education to be quality, but not to take much of my time and certainly not as a hurdle now that I’ve been “in” since 1988.
In short, I want fewer and better educators (like First Tuesday) but I want less of it. I didn’t get in the field to support a cottage industry, an mls and a gov’t dept. Education cannot replace enforcement. I mean fraud enforcement, not one piece of paper missing.
rob, yes, i am saying that and also that STUPID and INCOMPETENT agents are too easily able to get a license. they won’t always be green but will always be unqualified and will do much damage until they wash out. i am saying also that the continuing education req’s are too rudimentary to be meaningful. i’ve been through the cont/ed cycle many times by now and have been generally surprised by the low quality of the materials, first tuesday excluded. their stuff is much better and seems like they keep it updated.
the fact is that many persons go into real estate that are not qualified to sell shoes. we’ve all seen contracts written up with dozens of misspellings, inconsistent terms, incomplete phrases, missing numbers, faulty arithmetic, and on and on. the crap that passes for work product is appalling.
your earlier remark that brokers get treated easy to preserve their agents livelihood explains something for me…i’ve seen it! i am generally against regulation of all kinds, but if the state is going to pretend they do so, then let’s get meaningful barriers to entry so as to encourage capability…otherwise let’s stop fooling ourselves and certainly let’s not rejigger the regulators…what’s the point?
More government… More Fee’s, More gridlock!
Mike, you have a point. I was referring more to the broker license exam.
But are we saying that green agents do a lot of damage, or that there are just too many?
i’m right behind you tom. i think your business plan is a good one. i am in the process of licensing myself in oregon and hawaii. i have properties in both states already and have started the porting of my activities.
rob, your compliments are appreciated but inaccurate, the education requirement to sit for a license exam is LAUGHABLE! a two week correspondence course and a 70% rate on questions that a dullard could answer and you are licensed and in business! toss a few bucks to the assn. of realtors…who take all comers…and you have the appearance of a legitimate businessman. fantastic.
anyone suggesting that there will be less state employees after a “consolidation” has not been paying attention for the last few years…the state only adds public sector jobs…it’s what we do
The concerns raised are very valid, but real solutions are elusive.
Consolidation makes sense, although the nicer, lower level people usually get hurt disproportionately. It also does not, in itself, change anything other than the budget.
Any scheme that would further chain new agents to brokers will probably further institutionalize some of the practices we don’t like in the industry. The opportunity for an agent to strike out on his own as a broker (after passing the exam) is one of the few constraints on the existing unhealthy consolidation of power among big brokers.
There is plenty of education, and good education, available. (Guys, you provide the best there is!). All that needs to be done is for enforcement to focus on the more serious offenses and revoke more often, instead of suspend or warn. Ever hear of a big broker with a bad deed that gets a “stay” so that the inhouse agents can keep working? I have.
Find a way to resolve that, and kick the broker out of the business. Things would change fast.
That all said, I don’t think brokers and agents are among the terribly guilty in the crash, but I do believe it’s our responsibility to ensure people qualify for fixed loans before we sell them houses. The market will be healthier as a result (someday).
I salute you, my brethren.
I agree with you Mike … the ideas that Brown comes up with only help Unions and add to the to the government labor force needed to cover all these different departments. My goal is to sell a ton of short sales even the million dollar mansion short sales and move to the Island of Fiji.
if the suggestion is that the education requirements are inadequate then i can ONLY agree. if the suggestion is that a LARGER less targeted bureaucracy is needed…ARE YOU GUYS RETARDED?
Brown has moved to conceive an Office of Business Oversight…AN ENTIRELY NEW REGULATORY BODY. the same hacks that brought you the CARB, the same dopes that have foisted AB 32 on us, the same retards that have us on the hook for a train from fresno to bakersfield…
YEAH, LET’S DO EVEN MORE TO DRIVE BUSINESSES OUT OF CALIFORNIA. I am leaving…you guys can have it.
Realtors should want less government intervention NOT more…you will be cutting your own throats down the line. More Federal intervention will only handicap you at a local level. You would think you have already learned that lesson.
I also disagree with first tuesday. The problem is honesty, a course cannot teach someone to be honest. Its the knd of thing you have or you don’t have.
It has always struck me as a violation of segregation of duties to have mortgage lending administrated by a real estate sales department.
Do not agree with First Tuesday’s position. There is Far Too much bureaucracy as it is. Oversite should come from the private sector.Liberalism is the disease. and this is why first tuesday only considers liberals (excludes GOP) to be “real people”! Less is more! the whole system is batched. with over reaching social programs.and Over protectionism. Citizens need to bare more resposibilities for there well being. It is not the Taxpayers who should pay for their ignorance.
My concern is that NMLS was set up for the purpose of collecting data and collecting large fees. DRE is a duplication for MLO’s SAVE MONEY Governor Brown.