Bottomline Real Estate

by

Published: April 12,1999

The Legislature passed legislation in late March, and sent it on to the governor’s office, that should help raise the bar of professionalism in the Mississippi real estate business.

BACKGROUND

Specifically, the Mississippi Real Estate Commission (MREC), the state agency composed of five commissioners appointed by the governor, has requested increases in license fees. The commission, under the able leadership of Dr. Robert Praytor, has demonstrated that it cannot operate on the same fee basis as has been in existence for approximately the last decade. One could hardly argue that a fee increase is not reasonable, given the increases in operating costs, rents, salaries and general overhead that all businesses have encountered over the last decade.

The commission knew that it would need the support of the Mississippi Association of Realtors (MAR) in order to get such a fee increase passed, especially in an election year, when most legislators are loathe to pass fee increases.

At the same time, MAR wanted increased continuing education requirements for licensees to increase the competency of brokers and agents out in the field, listing and selling real estate for consumers. Besides that, it was the commission’s desire to see increased continuing education as well.

DETAILS, DETAILS, DETAILS

As originally submitted with the joint backing of both MREC and MAR, the changes to the Real Estate License Law Bill that would come from the passing of SB 2947 were headlined by an increase to 20 hours of continuing ed per two-year period, up 250% from the current eight-hour requirement per two-year period. As the legislation bounced between the House and the Senate, the ambitious increase to 20 hours was whittled down to 16 hours every two years. MAR, probably more than MREC, hated to see the reduction since even at the 20-hour level Mississippi was only moving up to the average of the adjacent states — Louisiana, Alabama, Tennessee and Arkansas — and certainly wasn’t “setting the curve” for training in the Southeast. Still, the general conclusion was that it was a compromise both MAR and MREC could live with in order to get the bar raised — MAR’s major objective.

Additionally, a 30-hour continuing education requirement for newly-licensed agents would be required. This post-license education would have to be completed within one year of receiving an initial license from the MREC. The idea here is that during that first year agents tend to make more critical mistakes and violations of the law. If first-year post licensing education is properly structured and addresses the areas of frequent transgressions, it would follow that there should be measurably less future complaints. Ultimately, the one who gains the most from this is, of course, the consumers — the buyers and sellers — of our state.

The commission would receive the authority to increase fees for brokers and salespersons. The increase for brokers and salespersons is only going to be $50 and that is for a two-year period. It is the commission’s position that without such an increase, services to licensees would have to be significantly reduced by the year’s end.

While the Realtors weren’t looking for reasons to have their dues increased, they took the higher ground on this issue and concurred with the commission that such an increase, even though costing their members, was nonetheless necessary and justified.

The commission also would receive authority to determine the content of the seller disclosure form — the form wherein sellers are required, when a broker is involved in a sale, to disclose to the owners any known defects in the hours. Herefore changing this form was a legislative and unnecessarily clumsy exercise. Lastly, the commission was granted under SB 2947, the right to create a searchable Internet-based directory of licensees in lieu of printing an annual directory. No big deal but a considerable savings of manpower and publication costs for the MREC.

Most final pieces of legislation contain compromises of one sort or another. SB 2947 was no exception. The Realtors had to accept a reduction from 20 to 16 hours of continuing education per two-year licensing period.

ON THE RIGHT TRACK

Though not perfect, this legislation is a step in the right direction. In an era where we hear so much about the bar being constantly lowered, it is refreshing, as well as encouraging, to see that in this case the bar is being raised — significantly. This is good for licensees and, more important, is good for Mississippi consumers.

Brewer’s Bottomline: Given that when a consumer deals in real estate he or she is normally making the largest financial decision of one’s life, it behooves the Mississippi Association of Realtors, the Mississippi Real Estate Commission and the Legislature to continue to “raise the bar” of those licensed to handle such financially critical decisions. SB 2947 is a move in that direction. The Legislature, and particularly Senators Clyde Woodfield (Gulfport), Billy Hewes (Gulfport) and Billy Thames (Mize), along with House conferees Ed Blackmon (Canton), Jeff Smith (Columbus) and Joe Mitch McElwain (Ripley), should be congratulated for their leadership in hammering out the final version, one that could receive broad-based support and be delivered to the governor for his signature and enactment into state law.

Jerry G. Brewer, SRA, ALC, is a general certified appraiser with Brewer Appraisal Service in Senatobia.

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