House Bill 863 unanimously passed a Consumer Protection and Professional Licensure Committee vote in the Senate yesterday.
The bill will next go to the floor of the Senate. The bill amends the Real Estate Licensing and Registration Act, requiring new real estate licensees to obtain additional pre-licensure education to increase the level of professionalism in the industry. The bill also permits agents to conduct broker price opinions, if allowed by their brokers.
Rep. Greg Rothman (R-Dauphin), a Realtor® who introduced the bill, explained that currently, licensees need 60 hours of education, if the bill passes, that will be increased to 75 hours. Across the country, the average requirement is 79 hours. It also ensures that licensees complete all the licensing courses, along with passing the real estate exam, within a five-year period. Agents would also be required to have a high school diploma or equivalent to become licensed.
The bill will also permit real estate licensees to conduct broker price opinions, or BPOs, with restrictive use. The amendment allows BPOs only for an entity or financial institution. The association recognizes that BPOs are not certified appraisals, nor do they take the place of one. The BPO fee would be paid directly to the broker, and agents would have to take a valuation certification course, be licensed for at least three years and take valuation continuing education each two-year cycle.
Sen. Wayne D. Fontana (D-Allegheny), also a Realtor®, said during the committee meeting, “We need to professionalize the process of becoming real estate agents and brokers.”
“While the real estate industry has changed dramatically over the last 30 years, the educational requirements to obtain a license have not changed at all. Increasing the hours of pre-licensure education will allow Realtors® to provide more professional services to their clients from the very beginning of their career,” said PAR President Todd Umbenhauer.
According to the bill, BPOs could only be used for: in conjunction with real estate owned or REO, loan modifications, short sales, and portfolio evaluation/monitoring. BPOs could not be used for bankruptcy, tax appeals, eminent domain, divorce, equitable distribution, actions before any court or loan origination.