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Shortage of licensed realtors harms industry
By Nie Xin

THE demand for realtor certificates is decreasing due to the subdued property market. Several years ago as the property market boomed, property agencies were sprouting up all across Shanghai. They opened so fast there was a shortage of licensed realtors since a property agency needs to have at least three licensed realtors in order to open.

This created a demand for realtor certificates. Soon afterwards, authenticated documents were "rented" to unlicensed realtors. Yang Cheng had 15 years of experience in the industry and received a realtor's license eight years ago. He quit three years ago, but said his license was in big demand, especially in 2009 and 2010.

"At that time, I could rent my license for about 1,200 yuan (US$190) a month because there were so many newly opened agencies. But now the price is only about 600 yuan a month," Yang said.

On websites where realtors congregate, some promotion notices advertise realtor licenses for 5,000 yuan a year, but these days few people are interested as the property market has been in a prolonged slump.

"Opening a real estate agency by leasing realtors' licenses is very common in this industry. There are no specific rules to control this gray area," said Tang Desheng, a lawyer and legal counselor with Greenland Holding Group.

The central government tightened regulations on property sales in 2010, resulting in a significant drop in transactions for both new and existing homes. This has squeezed many property agencies and forced some out of business. Still, some industry insiders see this as a good chance to standardize

the market.

"The requirement to have at least three licensed realtors is designed to standardize the industry. To open an estate agency by renting credentials is illegal and not good for the industry," said Dastine Huang from the Shanghai office of Cushman & Wakefield, an international privately held commercial real estate services firm. Huang received his qualification 10 years ago. The license is necessary and important for people who would like to develop their career in the industry.

Huang said it's not easy to pass the qualifying exam, plus applicants who want to take the examination first need to meet education and working experience requirements. For example, applicants who have an undergraduate degree need only four years of experience in the industry. Those with less education need eight years of experience. Masters degree holders only need two years of experience working at an agency.

"The requirements limit people who can become either a real estate agent or work in an agency," Huang added. "Just because you dress up in a nice suit doesn't mean you are a professional realtor. The drop in the market may weed out the unprofessional operators and agencies, leaving only the best behind. This would be good for the industry."

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