Raising the bar

Real estate education standards have languished for far too long. As the NSW Government completes a review of the requirements, REINSW has made its case for a more robust and comprehensive regime.

By Cath Dickinson

“Upon the subject of education … I can only say that I view it as the most important subject which we as people can be engaged in.” So said Abraham Lincoln. And it’s a view wholeheartedly shared by REINSW.

For more than 10 years, REINSW has been lobbying the government to review and improve education standards for our profession. But as REINSW has been calling for higher standards, the government has instead removed all barriers to entry in their pursuit of serving the interests of competition.

“We support competition as an essential market force and as a mechanism for quality service,” REINSW CEO Tim McKibbin said. “But equally, we strongly believe that the competition must be competent.

“Yes, the current training regime has achieved increased competition. However it’s also had the effect of diluting the aggregate skills and competencies of the profession to the detriment of the property consumer.”

Review aims to raise standards

NSW Fair Trading has asked an independent four-person panel to review existing training standards within the property industry. Members of the panel were nominated by industry stakeholders, including REINSW.

In its Discussion Paper regarding the review, NSW Fair Trading said: “If the key role of an agent is to appraise the potential sale or leasing price of a property and to recommend a listing price, a certain level of skill is needed to perform this task.”

The Discussion Paper goes on to say: “There are also technical skills needed to manage trust accounts, as agents typically handle large amounts of money as deposits for vendors/purchasers, rents collected on behalf of landlords and rental bonds.”

The Minister for Innovation and Better Regulation, Victor Dominello, supports the review and describes training standards as a “major issue” for the real estate industry.

At the REINSW Industry Summit in November 2015, he congratulated the Institute on its leadership in this area and acknowledged that “the industry needs to raise standards, there’s no doubt about it.”

Mr McKibbin has welcomed the review. “We’re pleased to have the opportunity to formally put our proposals for reform to the government on this important issue,” he said.

Experience counts

“There needs to be a marriage between theoretical learning and the knowledge and experience a student gains on the job,” Mr McKibbin said. “Learning is not the product of teaching alone. It is also the product of activities completed by the learner themselves.

“If a student does not have the benefit of theory, then they will do what they have been shown but will not understand why they are doing it. Equally, if there is an absence of practical experience, the student will understand what needs to be done but will not know how to do it.

“Practice makes perfect, and each level of education under REINSW’s proposal ensures an adequate balance between theoretical learning and practical experience.”

Submission

In its submission in response to the Discussion Paper, REINSW outlined its views about increasing and improving education standards at all levels of the profession.

“The overwhelming majority of issues that attract the attention of the regulator and aggravate consumers can be resolved by substantially improving the education of property professionals,” Mr McKibbin said.

You can read the full submission here >>>

Certificate of Registration

REINSW has proposed that any new entrant to the profession should be required to successfully complete seven units of competence, and then only be able to apply for a provisional Certificate of Registration.

Under REINSW’s proposed regime, the new entrant would then have two years to complete a further 17 units to acquire their full Certificate IV in Property Services (Real Estate) and apply for removal of the provisional notation on their certificate.“Completing seven units of competence and obtaining a provisional Certificate of Registration is not an unreasonable or onerous pre-requisite to starting employment,” REINSW CEO Mr McKibbin said.

“One of the common complaints we hear from employers is that new entrants are not ‘job ready’. Completing the three additional units prior to starting work will at least in part address this. Then, with the extra study required to achieve the Certificate IV plus the two years of practical experience, the individual should develop into a capable, knowledgeable and skilled professional.”

Real Estate Licence

There’s a reasonable market expectation that the services offered by a licensed real estate agent are superior to those of an agent holding only a Certificate of Registration. That market expectation and the agent’s desire to distinguish themselves needs to be supported by tangible education and experience.

Therefore, REINSW has proposed that in order to be eligible to apply to the regulator for a Real Estate Licence the applicant should complete the Diploma in Property Services (Agency Management).

In the case of an individual becoming a Licensee-in-charge, there will be an additional step. The skills and knowledge required by an agency owner are vastly different to those of an employed licensed agent. With this in mind, REINSW proposes that any agent who wants to own and operate their own agency must have at least two years’ experience working under the supervision of a licensee-in charge.

“This requirement will, at least in part, protect the inexperienced agent from their own exuberant ambitions, which may potentially result in business failure and consumer detriment,” Mr McKibbin said.

Ongoing education

REINSW firmly believes that Continuing Professional Development is an essential element of the maintenance of professional skills.

“It’s a sad fact that there are plenty of quick and cheap providers of CPD,” Mr McKibbin said. “The benefits of a quality CPD program are many. A properly designed and policed CPD program will provide the profession with structured learning about the requirements of new laws, as well as keeping them up to date with market trends affecting the interests of consumers.

“It’s difficult to understand how our profession is to remain compliant, particularly with the ever-increasing activities of government within the real estate space, if there is no mandatory and structured education program.

“It’s naïve for government to believe that every member of the profession will voluntarily and proactively seek out an understanding of these issues and then amend their agency procedures and processes to comply. The legislative intent of Parliament will only be achieved if those at the coal face are properly educated on an ongoing basis with respect to the legislative and regulatory instruments governing practice.”