An encounter happened to me this week that got me thinking, why is real estate so different from state to state, or even county to county?
Consider a major difference in MO:
- In St Louis and St Charles each party in the contract pays their own title expenses and each choose which title company they want to use.
- In the Kansas City area both parties usually use the title company chosen by the Seller. The Seller is also responsible for all fees.
Consider a major different in CA:
- In the LA area parties use an escrow officer that is usually paid on a commission to procure deals for the company. This party handles all the processing of the paperwork but does not provide directly any title insurance.
- In San Francisco most individuals use a title company which does all of the paperwork and also provides the title insurance policy directly through their company.
Now lets look at the differences state to state:
- Licensing: some states require as little as 40 hours of training to be able to sell someone’s most important asset, furthermore some states require little to no extra training to manage teams of agents.
- MLS: some MLSs provide excellent access to information. Some don’t even allow you to list if a property is a foreclosure, thus preventing clients from being able to make sure searches.
- Branding: some states allow agents to advertise without indicating their brokerage company name in any of their advertising, other states require that the brokerage name, logo, and phone number be listed on all advertisements.
My suggestion is just like there exists a UCC (uniform commercial code) for business, why can’t their be a UREC, a Uniform Real Estate code? Meaning the laws from state to state, and operations would be somewhat standardized. I’m certainly not suggesting that every state must have the same rules, however some standardization.
Consider that if I have gone through and become a designated broker in MO, it might take years before I can achieve the same certification in TX. Furthermore, many of the reciprocal Securities brokers don’t have this problem. Lawyers can apply to work “pro hoc vitae” where they are allowed to practice law in another state for a temporary basis.
Some states are already seeing that this is a need. I’ve seen some allow for commercial real estate agents to apply to sell one property in a different state. (MO and other states call this “portability”)
Why not make it an easier process to have licenses in multiple states and why not create a uniform code for most transactions?