When it comes to the Internet and real estate there ought to be one central place where anyone can go to see who is licensed and who isn't. Such a service would be great for consumers and also for brokers, information very much in the public interest.
Such a service is now evolving: The Association of Real Estate License Law Officials is putting together a listing of real estate brokers and salespeople by state and province. While the project is not finished, what has been done to date is impressive.
According to ARELLO Executive Vice President Craig Cheatham, the organization includes real estate regulators in 48 states (Minnesota and Wisconsin are the exceptions), four additional jurisdictions (The District of Columbia, Puerto Rico, Guam, and the Virgin Islands), six Canadian provinces, four Australian states, and a number of foreign countries (Bermuda, South Africa, Hong Kong, Philippines, Bahamas, Zimbabwe, El Salvador, Dominican Republic, Guatemala, and Honduras).
So far, almost 30 U.S. states are listing licensee information on the ARELLO system, as well as British Columbia and the Northwest Territories in Canada. Two additional Canadian provinces, Alberta and Saskatchewan, are expected to participate soon.
The ARELLO system is in an early stage of development, but you can see where this is going and why it's important.
Consumers want such information because they may otherwise rely on someone who is unlicensed. Unlicensed individuals present a series of concerns, including competence (or a lack thereof) and money (think of co-mingling cash, fraud, improper accounting, the lack of escrow funds, etc.).
But creating such a system on a national basis is difficult and costly: Different jurisdictions use different database systems and codes to track more than 2 million licensees. Moreover, state laws differ, which means information available in one state may not be available in others.
Some states offer minimal data while others, such as California, include historic information such as when an individual was first licensed, whether they have been subject to any state disciplinary actions, and the brokers who represent corporate organizations. This is stuff the public should know.
ARELLO very much has the right idea and you can see where this is going: In time it will be possible to not only search licensee records in every jurisdiction, it will also be possible search across borders. For instance, enter a name and you'll be able to see all the areas where an individual or company is licensed -- and where they aren't. Think of the value of such a system in multi-jurisdiction metro areas such as Washington, D.C., Maryland, and Virginia or Kansas City, Missouri and Kansas City, Kansas. Or think of how useful a single national system will be to check online real estate sources. In fact, a real estate web page could be set up to include a link to the ARELLO system so that consumers and other brokers could easily check an individual's licensure status.
Another potential value with a uniform national system would be in the form of cross-jurisdictional alerts so that someone banned from the practice of real estate in one jurisdiction is not magically in business somewhere else.
A final advantage of the ARELLO system may be this: The creation of a uniform database that can be used by all real estate regulators.
The issue here is not-so-much technology as the ability under controlling laws to assemble and distribute information. It may be that some states under existing rules are not currently authorized to collect or publish certain information, rules which may change as the value of full licensure disclosure becomes apparent. In such cases, the existence of a national system will help individual state regulators push for tougher disclosure standards to better serve the public.
ARELLO has done something online which is both useful and creative. A national registry, or what is as close as possible to a national licensee registry, is a great idea and should be supported by both the industry and consumer groups. There just isn't a downside.