This article is the first of a three-part series called: Real Estate’s Turning Point: Inside the Battle for The Future where we cover what’s really going on right now and the impact it will have for everyone involved. It is intended for anyone interested in getting beyond the headlines.

When I entered the real estate industry, one of the first things I observed was the vast variability in agent quality. Some professionals ran highly successful businesses with a deep understanding of their craft. Others seemed to be making money, yet I couldn’t quite understand how.

As I began to investigate the root cause, I learned there were some (not surprising) much bigger forces at play. Here we cover those as well as a potential solution.

But first, let’s start by simply defining the purpose of a real estate agent.

What is the fundamental purpose of a real estate agent?

At its core, the role of a real estate agent is to:

• Facilitate property transactions by connecting buyers and sellers.
• Provide expertise on pricing, market trends, and legal considerations.
• Guide clients through complex negotiations and paperwork.
• Ensure ethical and fair dealings in property transactions.

Essentially, help a client buy or sell my home in the fastest way possible for the best price possible with an experience that is tailored to their needs.

Thus, the ideal real estate agent is a trusted advisor, not just a salesperson.

What is the root cause of real estate’s reputation problem?

The negative reputation of the industry doesn’t stem from an inherent flaw in the role of the real estate agent, but rather from misaligned incentives of various industry stakeholders.

• Low Barriers to Entry: Many states require minimal education and experience, allowing under-qualified individuals to enter the field. Plus, this can vary significantly by state. For example:
  • In Vermont, a person needs only a high school diploma, 40 hours of education, and a passed exam to begin selling real estate. 
  • In contrast, Texas requires 180 hours of pre-licensing coursework, plus an additional 90 hours within the first two years.
• Incentive for Volume Over Quality: Licensing bodies (state governments, NAR, brokerages) profit from having more agents, not necessarily better ones. Their incentive structures aren’t always aligned with quality. For example:
  • NAR benefits from a higher membership count, which means less incentive to raise standards.
  • Many brokerages operate on a desk-fee model, where profit is tied to agent count, not agent success. Or, for those that do focus on agent productivity, they need to recruit lower producers at higher splits to help pay for the more generous splits offered to high producers.
  • State licensing boards are politically influenced and resist increasing barriers to entry for employment reasons.
• Public Perception Issues:
  • TV Shows & Social Media glamorize real estate, making it seem easy and profitable.
  • Recent lawsuits & regulatory scrutiny (e.g., DOJ vs. NAR) fuel public distrust.
  • Tech industry narratives paint agents as “middlemen” who add cost but little value. If you want to hear it directly from someone, check this out.

Why does the problem persist?

• Lack of Industry-Wide Accountability: Unlike law, medicine, or finance, real estate has no universally recognized, rigorous credential to separate serious professionals from those that are not. Because licensing requirements are done at the state level, there is no consistency.
• Short-Term Incentives Dominate: Governments, NAR, and brokerages prioritize revenue from more agents over long-term industry credibility.
• Consumers Lack Easy Ways to Identify Competence: There is no clear credential that guarantees expertise.

The Path Forward

Many high-performing agents are embracing this moment. They want:

• Higher licensing standards
• A purge of agents who don’t treat real estate as a true business and advisory role
• A differentiation mechanism for experienced professionals beyond brokerage affiliation

A New Designation for a New Era

I believe the original idea behind the REALTOR® designation was right, but it’s time for an update. Here are some proposals:

1. Create a New National Designation – A modernized brand independent of NAR. While NAR is doing everything it can to mend its tarnished reputation, it will be a difficult, long road. This also requires coordination at the state level where licensing requiements & exams are run today.
2. Model It After Financial Services Certifications – Establish rigorous education and experience requirements. For example:
   1. FINRA was established in collaboration with the SEC to “protect investors and safeguard the integrity of our capital markets so everyone can invest with confidence.” They offer the well known Series 7 which requires education, exam and a bachelor’s degree. 
   2. Or, if you want to be a Certified Financial Planner (CFP), you must complete education, exam, plus practical hours – either 6,000 hours of direct or 4,000 hours of apprenticeship. (Compare this to some states that require just 40 hours of education & an exam to get your real estate license.)
3. Establish an Independent Nonprofit to Oversee It – Led by agents, brokerage leaders, and industry professionals, not another industry association, MLS or NAR affiliates.
4. Charge for Education, Not Membership – Instead of recurring  membership dues, fees just fund the operation required to deliver the required education and testing. Consumer awareness isn’t the task of the group, it’s done by those who are designated directly with their clients.

Pros for This Approach

• Brokerage-Agnostic Differentiation – Consumers need a clear way to identify top-tier agents.
• Brokerage Support – Better agents are more cost-effective to support at scale.
• Filling NAR’s Credibility Gap – Consumers need a trusted standard beyond the current REALTOR® designation which focuses solely on ethics.
• Not just a new version of NAR – large institutions aren’t in favor right now and creating another “new and improved” industry membership organization is ambitious. If we start with just this one slice, we increase the likelihood of it’s success.

Challenges to Consider

• Driving Adoption – A new certification would need wide industry acceptance. One of the reasons things have been slow to evolve in residential real estate is the localized nature of how it was built. But, perhaps pick a specific state to start and prove value before going more broadly.
• Experience-Based Entry – Agents that are more experienced might balk about needing this. There might need to be a way to grandfather in experienced agents without undermining the standard.

Final Thoughts

The real estate industry is at an inflection point. If we want to restore trust, we must shift from a volume-based approach to a quality-driven profession. That starts with raising standards, embracing accountability, and empowering the most knowledgeable professionals.

In the end, designations alone will not be enough to drive agent value; however, this could be an important step in tackling the reputation problem.

In our second installment – we’re going to cover the fight for data ownership in residential real estate looking at the history of the MLSs and how the current battle is shaping the future.

In our third installment, we’re going to cover the race to own the full transaction and the impact potential outcomes could have across key industry stakeholders – including agents and their clients.