As a licensed agent, I have often wondered this about hairdressers. Why do hairdressers need to be licensed?
Licensure for certain professions is done primarily to protect the public from incompetence. Licensure ensures a basic level of competence for a large number of professions. My hairdresser has a license because her work requires her to use chemicals, hot irons, sharp scissors, and other potentially hazardous items. Holding a license and being accountable to the licensing authority helps to ensure the competence of services and safety of customers.
In real estate, we are regulated because a person’s home or investment property is generally the most expensive thing they ever buy or sell. It is a complex legal and financial transaction. Incompetence can be dangerous. People have actually died as a result of incompetent property transfers. That is rare. The more common scenario is loss of money, loss of equity, loss of the property, or legal jeopardy. Anyone who thinks agents can and should be eliminated should spend a day or two at the local real estate licensing board as they review complaints from buyers and sellers who have been harmed by incompetent agents. On occasion, they do revoke licenses when agents haven’t followed the regulations and caused harm to a client. Regulation isn’t perfect, but it does serve to weed out those who do not have the character or competence to be in charge of such a valuable asset as a piece of real property.