Catchy headline. What the State of Illinois is doing is similar to what Colorado, New Mexico and possibly other States have already done. All real estate agents will need to become real estate brokers to retain their license. Brokers who manage agents will need to become Managing brokers. Oh, and did I mention that the state licensing fees go up 83%. Many view this move simply as a way to tax professionals.
Illinois real estate agents have until March 15th to complete the training (15 hours) and take a competency test to meet new rules. By the way, the 83% increase in licensing fees does not include the training class. Only about 21% of Illinois agents have taken the test. That equates to about 14,000 of the 67,000 agents licensed in the state.
It will be very interesting to see what happens between now and March 15th. Most industry insiders have indicated that little will change aside from the fees that REALTORS and brokers pay for their license. It will not have a significant impact on the quality of service or expertise that an agent delivers to a home buying or selling consumer.
There is some concern among MLS Executives and Association Executives that this relicensing requirement and fee increase will create mass exodus from real estate as a profession. I hope that the impact is slight because the budget impact to these organizations could pose a significant threat to their ability to serve the real estate professional.
There is a more telling story here. It is a story about the industry’s ability to communicate with its professionals. Presumably every agent would know of the requirement, and have a plan in place to take the coursework to keep their license. 80% of the agents have not gone through the process yet, which tells me that they may be uninformed, ambivalent, or indolent. The new licensing requirements were passed into law in 2009.
If agents to not take the 15 hours of class and pass the competency examination by March 15th, they will be required to take a 30 Hour class and pass the exam by April 30th when the new law takes effect. After April 30th, their license will be revoked.
Each year, about 20% of licenses are lost in Illinois through attrition. It will be interesting to see what happens this time around. It is unclear if the National Association of REALTORS or the Illinois State Association of REALTORS or local Associations of REALTORS have made any efforts to ask the courts to suspend the timeline for this new license to take effect.
(joke: The State did not place any requirements for consumers to have licenses to sell their homes without the assistance of a professional. No real estate publishers who advertise listings by real estate brokers are required to pay any licensing fees.)