Most of us would probably agree with that characterization.  But, what does it take to get there, to achieve that end?

In the real estate business, many of us define personal success in terms of goal achievement, and numbers or monetary sales goals met.  For others, it may be as simple as satisfied clients.  But, whatever measure is used, what strategy do we use to acheive those goals?  What about clients, home buyers or sellers?  What methods do they use to maximize their chances of success?

For years, Fortune 500 companies have looked for certain qualities in their future employees.   For many, they are looking specifically for the ”braniacs”.   But at least one of those companies, has, for years, used a different approach.

Jack Welch, General Electric’s Chairman and CEO from 1981 – 2001, used another approach.  He looked, not necessarily for brains, but for what he called the Four E’s.

According to Jack Welch, it’s as easy as Four E’s.

This is the criteria he used to assess employees at GE.

1. Do they have the energy – positive energy?  Do they start the day with enthusiasm, and end it that way too?

2. Do they energize others?  According to Welch, “it doesn’t do you much good to be a whirling dervish if you don’t end up exciting other people.”

3. Do they have edge?  Do they have the ability to say ‘yes’ or ‘no,’ and not ‘maybe’? Do they make the tough calls?

4. The fourth E is execute. Do they get the job done?  In other words, do they deliver?

Said Welch, “Integrity is assumed. These four E’s—when you look at people and want to evaluate them, and when you look at yourself and evaluate yourself this way—give you a pretty good read on where you stand.”

According to Welch, this recipe for success will work in any environment.

If that’s the case, should we be looking for the Four E’s when we hire employees?  Are those considerations we’ve used in selecting peers for leadership positions?  If not, why not?

Are buyers and sellers looking for these qualites in the agents they hire to represent them?  It would certainly make perfect sense.  If they’re not, and, at the end of the day, leave the settlement table dissatisfied with their agent’s performance, they’ll have nobody to blame but themsleves.  It’s called, “Due Diligence.”

Current Requirements

As stipulated by the Virginia Real Estate Board (VREB), and set forth in the Virginia Code, § 54.1-2105, pre-licensing education requirements for those seeking a real estate license are:  

1. Every applicant for an initial license as a real estate salesperson shall have:

a. At a minimum, a high school diploma or its equivalent; and

b. Completed a course in the principles of real estate that carried an academic credit of at least four semester hours, but not less than 60 hours of classroom, correspondence, or other distance learning instruction, offered by an accredited university, college, community college, high school offering adult distributive education courses, or other school or educational institution offering an equivalent course.

In other words, to legally practice real estate in the Commonwealth of Virginia you need:

1. 60 hours of classroom instruction (you actually don’t have to be IN the classroom – online courses meet the requirement)
2. Passing a written examination.
3. Oh, I almost forgot, you also need a high school education, or its equivalent. 

So, having passed the state test, without having handled a contract, toured a home, negotiated a contract term or clause, or spoken to a client, a brand new licensee can “practice” real estate.  Is that adequate preparation to carry out a responsibility involving hundreds of thousands of dollars?  Is there another profession whose qualifications are as minimal?

Can you imagine a surgeon performing surgery without having gone through the steps a few times, not to mention hundreds of times, prior to going solo?  What about obtaining a driver’s license?  How many practices has the student driver had before they are operationally ready?  Before they are licensed?

One might argue that those are poor comparisons since a lack of adequate training or preparation in those professions might lead to death, whereas nothing that extreme might occur as a result of an error in a real estate transaction.  And, they have a point.  It may not result in a death, but incompetence and real estate “malpractice” could certainly costs tens of thousands, if not hundreds of thousands of dollars.

If you’re not satisfied with the comparison with a surgeon or a driver of a vehicle, what about teachers?  Are they licensed to teach without student teaching many, many times while being supervised.   What about an accountant?  An architect?  A bank teller?  In each case, minimal hands on “real life”, supervised training is required prior to the ”students” being given the OK or being certified to operate on their own.  Likewise, should this be required in our training?

In our profession of real estate, one may ask if this should be a pre-licensing criteria, or is it more suitably done after licensing, but as a first step of a mentoring program Realtors participate in once licensed and prior to operating on their own under the Broker of their choosing.  Hmmm…that’s something to consider.  For now, let’s begin by looking at improving pre-licensing training with a requirement of 60 college credit hours.

Learning is a never ending process.  While there are many constants in a real estate transaction, there are some variables that may change depending upon the client, brokerage firm, financing involved, and other related factors.  It’s important too remember that a standard curriculum can’t cover all the possible contingencies or circumstances a practitioner might face, however, it certainly should include many. 

Current pre-licensing coursework provides students with little practical instruction of how to do their job.  Its intent seems to be one of preparing students to pass a written test of concepts instead of preparing them to practice real estate.  But, in examining how Realtors are trained prior to being certified or licensed to practice, maybe we’re not asking the right questions.  Maybe we the should be asking, “What should pre-licensing instruction be designed to do?”  What outcome are we looking for?  Shouldn’t it be designed to prepare a candidate to do their job?  If not, why not?  For the sake of this series of articles, let’s assume that’s the objective.  We want to prepare Realtors to do their job properly, plain and simple.  In other words, to carry out their job related tasks in a “professional” manner.  

Proposed Requirements

1. A first step in better preparing our prospective real estate agents for their job begins with dramatically increasing their pre-licensing requirements.  This can be accomplished through augmentation of the depth and breath of the classroom curriculum.  While there is no substitution for experience, the increased use of case studies, and a more detailed examination of contracts and real estate practices, to include real estate finance among other topics, will provide candidates with a better base of practical problems and solutions to learn from.
2. To adequately prepare Realtor candidates, the pre-licensing curriculum should be expanded from the current 60 classroom hours to 60 college credit hours.  Not only would these college credit hours substantially increase students exposure to real estate material, but, doing so would also provide them with college level credit.  In accordance with state guidelines, the specific content of the real estate courses “shall be in real estate brokerage, real estate finance, real estate appraisal, real estate law, and such related subjects as are approved by the Board.”  Incorporated in this coursework should be 10 hours of “hands on” practice.  This practice includes interaction with clients, both buyers and sellers, writing contracts, negotiating terms, and experiencing the entirety of a real estate transaction from beginning to post closing follow up.  

While current pre-licensing training material provides students with a familiarity of real estate procedures (concepts can be identified if seen on a test), it does little to prepare these aspiring agents for practical problems they’ll face in a typical transaction.  Increasing classroom time, improving the course material, and providing “hands on” practical experience with real estate trasactions, are three steps that need to be taken in order to improve the pre-licensing requirements for those training to be real estate agents.  

Improving pre-licensing requirements for real estate agents is an initial step in attempting to improve our profession.  By providing new agents an improved foundation to build on, they’ll be better prepared for actual real estate practice and carrying out their job.  But, while they can now legally practice, how capable are they?  Probably capable enough to be dangerous, but not capable enough to be on their own.  And, that’s where the second step of the improvement process comes in, the use of a Mentoring program.

These words, spoken by President Kennedy’s friend and longtime advisor Ted Sorensen, were in response to a question about Kennedy’s exercise of judgment during the Cuban Missile Crisis.  As you can see, Mr. Sorensen emphasizes the importance of proper judgment in times of crisis.  He goes on to include decisiveness as another necessary leadership trait.  While Sorensen was focusing on Presidential Leadership, these traits, and judgment specifically, are “must haves” for any leader.  Recent words and deeds from Stafford County’s Supervisors makes one wonder if the word “judgment” was absent from their job application.  

First, we had the Business, Professional, and Occupational License (BPOL) tax approval by the Supervisors, despite overwhelming opposition (reported to be 9 to 1 against) from their constituents.  Following this vote, most of the county’s residents were asking themselves, “Did we really elect this group?”  The BPOL is a tax on gross receipts with no deductions and must be paid even if the business is losing money.  Advocates see BPOL as an untapped source of revenue. Those opposed regard it as grossly unfair.  The public hearing on the tax was long and heated, but at the end of the day (actually, the meeting ended about 3:00AM), the supervisors voted 4-3 in favor of the measure.  While innocent observers may wonder how occurred, a simple viewing of this short video of the meeting speaks volumes.  In other words, it kind of says it all…and, it ain’t pretty!

Click here to view the embedded video.

Last week another public forum discussion took place, another Supervisor’s public hearing, to discuss a controversial proposal to shrink the Urban Services Area (USA), portions of the county where public sewer lines can be extended and high density development is recommended.   Current USA boundaries encompass about 46,000 acres.  The new boundaries would remove over half – 26,000 acres – from the USA, and phase in another 5,000 acres by 2019. 

A recent study by George Mason economist Stephen Fuller found if the boundary changes are adopted, Stafford County could potentially lose around $100 million in net revenue from business.  While real estate taxes could rise to make up for the loss, it would essentially make the county a “high-cost location” from resident and businesses.  Instead of attractive new residents and businesses, higher costs would have the opposite effect.  Fuller’s study was paid for the Fredericksburg Regional Chamber of Commerce  who want supervisors to review it closely.  Supervisors indicated they plan on evaluating the boundary proposal during next month’s work session. 

For many Stafford County residents, there’s still plenty of room to grow.  For others, any growth is bad growth.  With any prospective venture, before we jump to conclusions, let’s try and make this a Win-Win resolution. 

One of the first steps in getting there might be by making a stop at Smart Growth, the site of some of the best and brightest ideas for smart community growth.   As they indicate, “In general, smart growth invests time, attention, and resources in restoring community and vitality to center cities and older suburbs.  New smart growth is more town-centered, is transit and pedestrian oriented, and has a greater mix of housing, commercial and retail uses.  It also preserves open space and many other environmental amenities.”  So, as you can see, it attempts to use the strengths and objectives of both sides of the argument to improve and expand communities. 

It might be a good idea if that and other useful sources of information were “required reading” before next month’s Stafford County Supervisors get together.  Judgment may be important, but it sure makes decision making a lot easier when you have the information you need before making a decision.

For those looking to purchase a home, the HOA covenants can be both a relief and a concern.  One of the considerations we face when purchasing a home in a particular neighborhood is, what do the HOA covanents cover?  Are there restrictions on the number of people who can live in a home?  How about the size of color of the fence?  Pool hours?  Will it help to keep the subdivision looking good?  As a matter of fact, HOA covenants are as restrictive as the home oweners decide they will be.  But, more than anything else, HOAs are designed to provide a neighborhood that its occupants enjoy living in, by maintaining standards that are theirs.

But, two recent cases have put the focus on the enforcement powers HOAs exercise.  The first case involved a California owner whose subdivision sent him a notice informing him that he was vioalating a subdivision rule prohibiting pickup trucks in the driveway.  And his pickup was new!  A Ford F-150. 

According to the HOA, luxury pickups like the Cadillac Escalade, Honda Ridgeline and Lincoln Mark LT are allowed, but not the the tried and true F-150.  Their belief is that these “luxury” pickups market to “a different class of people.”  The F-150 has to be parked out of sight and in the garage.

Last week, in another HOA exercise of power, a local Stafford home owner was ordered by the St. George’s Estates neighborhood HOA to remove political election signs from their yard or face a fine.  The home owners, Pat & Heather Stefl, responded by citing their consitutional right to free speech.   “I did not sign away my constitutional rights by buying into this home, and I do see this as a First Amendment right”, said Heather.  But, the Stefls may be out of luck.  While state law prohibits localities from banning the disply of political signs on private property, the law DOES NOT apply to HOAs.  The Stefls have until August 29th to comply.   

Guidelines and controls on what we can and can’t do with our property, aren’t restrictions to be taken lightly.  But, before we sign that contract for the purchase of your new home, or, more specifically, before we actually agree to the HOA covenants we’re handed to review as part of the home buying process, make sure you read and understand what you’re agreeing to.  As they say, ignorance is no excuse!