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- Rob Swan, Qualifying Broker, Swan Realty

After nearly two decades in real estate, I'm going to say something that might surprise you: much of the criticism you're reading about real estate agents online in my opinion is actually justified.

If you've spent any time on Reddit or other online forums, you've seen the complaints. Agents who disappeared after the sale. Agents who couldn't answer basic questions and my all time favorite, agents that can't answer their phones. Agents who earned thousands of dollars for what seemed like a few hours of work and some door-opening. And in the wake of recent industry lawsuits, these complaints are getting louder.

Here's the uncomfortable truth I've learned as both a qualifying broker and someone who has mentored new agents: the barrier to entry in our profession is far too low, and the consequences fall squarely on consumers.

The Reality of Becoming a Real Estate Agent

What Aspiring Agents Believe

There's a common perception among people considering a career in real estate: becoming an agent is easy, and agents make a lot of money. This belief draws thousands of new people into the profession every year, attracted by the promise of flexible schedules, unlimited income potential, and a low barrier to entry.

Let me separate fact from fiction about both of these beliefs.

The Easy Part: Getting Licensed (This Part Is True)

The first belief, that becoming a real estate agent is relatively easy, this part is absolutely correct. In New Mexico, it takes about two months and a couple thousand dollars to get licensed. That's it. No bachelor's degree required. No extensive apprenticeship. Just a couple months worth of classes and a relatively straightforward exam.

Compare that to a stockbroker, who must possess a bachelor's degree and complete around six months of intensive exam preparation before being entrusted with someone's financial assets. Yet real estate agents are handling what is typically the largest financial transaction of someone's life, often with a fraction of the training.

The Hard Part: Making Good Money (This Part Is False, At Least For Most)

The second belief, that real estate agents make a lot of money, is where reality crashes into perception. In our local MLS, the Enchanted Circle Association of Realtors (ecarnm.com), which covers Taos County and the Enchanted Circle area, the numbers tell a sobering story. When you divide the total dollar volume of properties sold by the average commission and the number of agent members, you get approximately $52,000 per agent annually. That's only modestly better than someone working a $20-per-hour job.

 

But even that number is misleading. According to Housing Wire, 20% of agents handle 80 to 90% of all transactions. Many agents complete zero transactions or just one or two per year. The majority of people who get their real estate license never make the significant income they envisioned when they signed up for that two-month course. This is why 87% of newly licensed brokers fail according to renown real estate coach Tom Ferry

Why Inexperienced Agents Are a Problem for Home Buyers and Sellers

Agents Learn By Doing Transactions

So what's wrong with agents who aren't doing many deals? The problem is simple: they never have the opportunity to learn to do the job well.

Real estate schools do a competent job of teaching the basics, they teach you enough to pass the licensing exam and hopefully not get yourself sued. But this education only skims the surface of what's actually needed to guide clients through complex transactions. The overwhelming majority of knowledge an agent possesses comes from on-the-job learning under a knowledgeable mentor, which in New Mexico means working under a qualifying broker who oversees their transactions.

Minimal Supervision Requirements in New Mexico

Here's where it gets concerning: in New Mexico, a qualifying broker is only obligated to oversee a minimal amount of a newly licensed associate broker's transactions. After that, the newly licensed agent can essentially work on their own. They operate as a contractor for the real estate firm and carry their own errors and omissions insurance policy. 

Consider what this means. Someone with two months of classroom education and perhaps six supervised transactions is now independently handling the largest financial decision most people will ever make. They're navigating a quagmire of laws, ordinances, zoning regulations, disclosure requirements, financing contingencies, and inspection issues. Any of these, if mishandled, can cost their client thousands of dollars or expose them to legal liability.

The Online Brokerage Problem

Making matters worse, many new agents today sign up with strictly online brokerages where their qualifying broker may live in an entirely different city. While these agents typically receive some online training and support, they may never actually meet their qualifying broker face-to-face. Is personal mentorship a prerequisite for success? Probably not. However, the absence of that one-on-one relationship with a mentor who allows the new agent to shadow them is priceless.  In this scenario, the traditional mentorship that should serve as the foundation of the new agent's education simply doesn't exist, and that's far from ideal.

The Button-Pusher Problem in Real Estate

The real estate industry has become filled with what I call "button pushers." These are people who have a rudimentary understanding of the business and have simply figured out which buttons to push within the system to generate a commission. They can list a property, schedule showings, and submit an offer. But they lack the deep knowledge needed to navigate complications, negotiate effectively on their client's behalf, or spot potential problems before they become expensive disasters.

When these agents collect a five or six-figure commission for minimal work and minimal value, the public's complaints are justified. No wonder the public is upset.

How to Fix Real Estate Agent Training and Licensing

I believe the solution requires fundamental changes to how we train and license real estate professionals. The education provided by real estate schools is sufficient as a starting point. Here's what I propose:

Mandatory One-Year Mentorship for New Agents

All agent candidates should be required to mentor under a qualifying broker for no less than one year, assisting on enough transactions to obtain genuine working knowledge of the profession. During this apprenticeship period, they should be studying for a much more thorough licensing exam.

Better Real Estate Licensing Exams

The new exam should include actual transaction scenarios requiring reasoned analysis and problem-solving, similar to a law school exam, rather than the current tests that rely heavily on memorization and regurgitation. The goal is to ensure candidates gain real-world experience before taking an exam that actually tests their understanding and competence, not just their ability to memorize facts they'll forget within weeks.

What Home Buyers and Sellers Need to Know About Agent Compensation

Not all real estate agents are created equal. Brokers who do the bare minimum, who lack deep understanding of the intricate ways real estate law, financing, inspection issues, local ordinances, and market conditions all interact, these agents probably are overpaid. 

But agents who truly understand this business, who have extensive experience navigating complex transactions, who can spot problems before they occur and advocate effectively for their clients, these professionals are worth every dime they earn.

How to Choose the Right Real Estate Agent

If you're considering buying or selling a home, do your homework. Vet your agent carefully. Ask about their experience:

Questions to Ask Your Real Estate Agent:

  • How many transactions have you closed and do you have a mentor to assist if you are newly licensed?
  • How long have you been in the business?
  • Can you explain the specific challenges in our local market?
  • Do you have expertise relevant to my particular situation, whether that's vacation rentals, land sales, new construction, or other specialized areas?

Check References Before Hiring an Agent

Ask for references and actually call them. A competent, experienced agent will welcome these questions. Someone who gets defensive or evasive probably isn't who you want representing you in the biggest financial transaction of your life.

The Future of the Real Estate Industry

The real estate industry needs higher standards, better training, and more rigorous oversight. Until that happens, the responsibility falls on you as a consumer to choose wisely. Your financial future and your peace of mind depend on it.

Rob Swan is the qualifying broker and owner of Swan Realty, Inc., with offices in Red River and Angel Fire, New Mexico, serving the Enchanted Circle area including Questa, Eagle Nest, and Taos County. With over two decades of real estate experience, he is currently a candidate for a Masters Of Legal Studies degree at the University of Arizona.