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March 22, 2007
You don’t need an Agent
We are warned that Utah law is a tougher exam than the national exam. In order to be a licensed agent in Utah, as well as most states, one must pass both a state and a national test. Utah law is intended to protect consumers from agents and seems pretty thorough.
25% of the Utah test involves understanding a HUD closing statement. National exams seem to test more common sense whereas Utah law tests one’s knowledge and understanding of Utah statutes.
The executive director of the Real Estate Division in Utah is appointed by the Department of Commerce’s executive director (who is appointed by the governor). This office tends to be rather long, as most directors remain for 5 – 10 years. Currently an attorney heads the position, and will do so until removed by the governor.
The Real Estate Division sets the fee (which is paid every two years) for license renewal, as well as manages and enforces laws applying to agents. They also control licensing, for example ruling that property managers must hold the same real estate license agents hold. They also send out a semiannual newsletter. This newsletter outlines actions taken against licensed agents, mortgage brokers and appraisers which can include fines and license revocation.
The commission has 5 members, one of which is a non licensed agent. They must have at least 5 years experience, and are selected from different counties in order to provide equal representation across the state.
In Utah you need a license in order to deal with any real estate transaction other than your own. This brought about a discussion the mentioned a few interesting things. We were warned to not show more than six homes a day to a client in order to avoid overwhelming them. We were also advised that we could use a broker as a convenient excuse to lie to clients. For example, if a client inquires about a reduced commission, we can insist that our broker prohibits that.
Interestingly, there exists a convenient loophole for those interested in selling a home for another. You ARE permitted to sell a home for a commission IF you have them sign power of attorney over to you. This could get you in trouble if you do it routinely, but it could be convenient in certain circumstances. You would want to be particularly careful to avoid soliciting others to do this however.
The class then began to attack “Fizzbos” (For Sale By Owners) with claims of how agents can sell homes for more than an owner trying to sell themselves. Claims that 90% of all owners end up with an agent eventually, most within the first two weeks sounded lofty and dreamful. To be honest, I have seen quite a few owners sell their homes themselves with good success. The key seems to be pricing right, and knowing the market. If you’re clueless, you probably WILL get more if you get a GOOD agent. A bad agent could be worse than what you’d do yourself.
We were warned not to be a broker. Brokers are broker than the agents the instructor joked. He is the broker of the school and is a millionaire, so he may have a vested interest in reducing competition. In order to be a broker in Utah you must first spend 3 Years being an agent.
Licenses in Utah no longer require High School diplomas. The test costs $68 and can be taken infinitely, but you do have to pay each time you take it. You are not allowed to bring in Solar or programmable calculators. You cannot pay with cash; you must use a cashier’s check or money order in order to take the test. They can be taken either during the morning or the afternoon and you are given up to four and a half hours to test.
Within 90 days of passing the test, you must decide if you want to be an active agent or an inactive one (pay the license fee). A nonresident can be licensed in Utah as long as they have an active license in their home state and pass the Utah licensing exam. One last note of interest is that of irrevocable consent in which you state your address. If you are served, and you haven’t updated that address you are still considered served.
When you come to a brokerage, they take control of and store your license in their office. So until you become a broker, don’t expect to see that baby on the wall.
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