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NAR Report Reveals Harsh Realities of Industry Challenges
Posted on: June 12, 2015 by Newmark Insurance
In a recent study, it was revealed that there are significant shifts happening within the real estate community. However, these changes are not necessarily positive ones. Given the nature of the realtors’ ethics in combination with a lack of training and knowledge, there are multiple issues with today’s real estate community. Investing in a Real Estate Errors and Omissions Policy can help protect your business against the claims of wrongdoing that could very likely stem from these harsh reports.
The Danger Report, or the Definitive Analysis of Negative Game Changers Emerging in Real Estate, states that a number of challenges are arising and continuing to change the industry. Here are 3 main concerns:
Low Entry Requirements- While most professionals must receive extensive and rigorous training, real estate agents are only required to complete a total of 70 hour in order to get their license. In some states, it’s as low as 13 hours. This is resulting in a lack of knowledge and setting the bar low for agents. As directly quoted by the report, “The real estate industry is saddled with a large number of part-time, untrained, unethical and/or incompetent agents. This knowledge gap threatens the credibility of the industry.” Talk about harsh!
No Educational Incentives- As the report states, there is a rising concern for the quality of the agents provided. However, there haven’t been any educational initiatives offered in order to improve the circumstances.
Commission Rates- In the United States, it is typical to charge a 6% commission rate on the sale of a home. However, in comparison, Great Britain charges an average 1-2% and Australia charges 2-3%. The problem with this number lies with the money conscious American. Because of this, these rates are under high level of scrutiny and real estate companies are being pushed to reduce their percentage to a fairer rate.
Given the recent developments in the real estate world, it is imperative that your business be protected with a Real Estate Liability policy. At NewMark Insurance Services, we are fully educated on the shifts occurring and are here to help protect your biggest asset-your business. To learn more, contact us today at (855) 777-6549.