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Realty License Rush Is on : 120,000 to Take Test Before Stricter Rules Apply

December 22, 1985|DON G. CAMPBELL | Times Staff Writer

The first "land rush" in Oklahoma in 1889 attracted 50,000 settlers and the second, in 1893, lured another 100,000.

Or a total of just 30,000 more applicants--over a four-year span--than will have signed up for the great California "land rush" of 1985. Not to homestead land, but to obtain the state's blessing to sell it.

In just nine days, at midnight, Dec. 31, those Californians who have filed their applications and have forwarded their exam fee ($25 for salespersons, $50 for brokers), and have had them received by the California Department of Real Estate, will be able to take the state's examination for real estate sales licenses under the old, more liberal rules.

Those whose applications are received on Jan. 1, 1986, or later, will find themselves facing new educational requirements simply to take the exam.

Swell Real Estate Ranks

By the end of the month, department commissioner James A. Edmonds, Jr., estimates, no fewer than 120,000 applications to take the exam will have been received this fiscal year--a stampede that has kept the state regulatory agency on an overtime basis since early summer and has put the administration of the exams on a six-day-a-week schedule.

If all 120,000 applicants this year actually pass the exam, it will swell the number of individuals licensed to sell real estate from the present 287,000 to 407,000, a 41% increase.

Based on estimates by the California Department of Finance, that would put one in every 43 adult Californians in the real estate business. Historically, however, Larry Cannon, managing deputy commissioner for the DRE, points out that only about 44% of the sales applicants taking the exam and 54% of the broker-applicants pass the exam on the first go-around.

Although the new legislation stiffening the educational requirements for both real estate brokers and salesmen (SB-1042, sponsored by Sen. Bill Lockyer (D-Hayward), was signed into law by Gov. George Deukmejian on March 29, 1984, it went virtually without notice for more than a year.

Applications Rising

"Until this May," according to Tom Hensley, the DRE's managing deputy commissioner, "applications for the exam kept coming in at about the usual rate--anywhere from 4,800 to about 6,000 a month. And then, all of a sudden, my chart started going up like crazy in May--to about 10,000 a month for the next five months and then to 13,000 in October.

"We don't have the final tally for November yet, but the figure will be over 15,000, and we expect to have 20,000 or more for December."

The best previous year was the boom period from June, 1977 to July, 1978, with 106,000 exams administered, while the worst time was 1982-83 when sky-high interest rates virtually shut down the entire real estate industry and only 23,000 applicants were optimistic enough to take the test.

Until Jan. 1, 1986, however, the old (present) rules apply, and those getting in under the wire need only to be at least 18 years old and have a warm body to take the exam--which, because of the backlog, Hensley said, could drag out through February or even March, two to three months, after the cut-off date.

"We'll accept the applications and checks right up to the Dec. 31 deadline," Hensley adds, "which means that a lot of these people applying for a sales license could really wait until the last minute, knowing that there will be this time lag in assigning them an exam date--and giving them time early next year to take some sort of training to prepare them for it."

Required Course Work

But those applying after Jan. 1 must have already taken, and passed, at least one college level course--Real Estate Principles--administered by an accredited school and, within the next 18 months, must also take two additional courses from the following list:

Real estate practices, real estate appraisal, accounting, business law, property management, legal aspects of real estate, real estate financing, real estate economics, escrows, or real estate office administration.

The attraction of getting in under the wire is only partially financial, Cannon emphasizes--the $25 or $50 exam fee remains in place, whether the application is accepted before, or after, Jan. 1.

But, for those sales applicants successfully passing the exam under the existing rules, the license fee, itself, is a flat $120. Those passing the exam under the 1986 rules will also have to have under their belt the basic, three-hour, principles of real estate course which, in itself, requires an outlay of cash to an accredited school.

They will also find that the $120 license fee is the minimum --applicable only to those who not only successfully pass the exam, but who also have completed the other two required courses as well.

Otherwise, the license fee will be $145, with the additional threat hanging over their heads that if they don't pick up those two other courses within 18 months, their newly won license will be automatically suspended.

Long-Standing Goal

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