Friday, September 21, 2018

North Carolina Real Estate Commission Please Repeal 58H 0303

     September 20, 2018

     Dear North Carolina Real Estate Commission

     I recently received a letter from Corean Hamlin.  In this letter she stated that the Commission has for years measured the performance of real estate instructors  based on the performance of their students.

     It appears to be the opinion of the Commission that an instructor can be so good that he can teach a person to pass the North Carolina real estate exam that does not study at all outside of real estate  class.

     It also appears from this that it is the opinion of the Commission that an instructor could be so bad that even if a student read the entire textbook and made flashcards and studied ceaselessly and availed  himself to several outside study aids, that student could fail the North Carolina real estate exam due to the ineptness of the instructor.  I can not follow this logic.

     It would seem that the student is the deciding factor as to whether or not the student passes the North Carolina real estate exam.  Why would two students sit in the same classroom for the same 75 hours with the same instructor with one having a result of making a 98% on the test and the person in the next desk making a 48 per cent ?  This is not an unusual story.

     I submit that the Commission's  method of evaluating instructor's skill by the performance of their students is flawed.  It is the student (not the instructor) that makes the difference.  In any real estate class, there are students that understand studying.  They have a basic knowledge of math.  They have a basic knowledge of real estate.  Some students have a college degree.  Some students have advanced degrees.  They take notes in class.  They avail themselves to other study aids that are recommended by the instructor and some that they find on their own.  They have leadership skills.  They start a study group that meets outside of class.  They watch my real estate math videos that are posted on You Tube.  They pass the real estate school test.  They pass the North Carolina real estate exam.

     There are other students in class.  They barely got out of high school.  The don't know the difference between the numerator and the denominator.  They work fifty hours at the plant.  They show up at my night class tired.  Have they done their assigned homework?  Have they answered the questions at the end of the chapter?  Are they listening to me?  The truth is they are probably trying.  I am trying to make explaining agency interesting for them.  As I am explaining it, they are texting their ten year old son that is home alone.

     They are plagued with problems.  Their husband is sick and not working.  Their car payment is overdue.  Their son just got kicked off the little league team.  Their spouse is having an affair.  They were arrested last week at the demonstration in Charlottesville.  Studying real estate is about number seven on their list of priorities.

     They scrape through my real estate school exam with a barely passing grade.  They go fail the North Carolina real estate exam.

     The Commission measures my performance ( Any Instructor's Performance) based on how  many of my students are able to leave my classroom and pass the North Carolina real estate exam the first time.  They could attend a state exam review from my competitor.  I don't teach such a class.  Why don't they avail themselves to such a class?   Some do.  Most don't.  They do not want to pay the tuition.  They could watch my free You Tube videos to help them with the math.  They are too tired.  They could read Appendix A in the textbook or listen to me read it to them from You Tube.  They are too busy for that.

     They could answer the questions in Dearborn's book, "Guide to Passing the the AMP Real Estate Exam".  They could but they have to attend their daughter's soccer game.  They could take my practice test at .  There is so much demand on their time.

     The Commission evaluates my performance,  Mr. Instructor's performance, based on the success or failure of  someone that I have absolutely NO control of.  The Commission connotes that it is my fault that Mr. Idon'thavetimetostudy fails the North Carolina real estate exam.

     Can I study for my student?  Can I make the book unboring? 

     What would happen if you dropped item 5 and 6 from rule 58H 0303   ? 

     Corean said in her letter that changing from 180 days to 30 days measurement period is "fairer and more accurate evaluation tool".

     There is nothing fair or accurate about evaluating me (or any other instructor) based on the performance of someone else, our  students.

     The students come to us with language problems.  They come to us without basic math skills.  They come to us with no study skills.  They come to us with enough personal problems to write a soap opera.  They come to us with stress and anxiety.  My ability to teach someone that does not want to expend the effort required to learn is how the Commission thinks I should be evaluated.  Does the Commission think I am a good instructor if I can instill in them the desire to learn?  Is that the job of the North Carolina real estate instructor?  That does not seem right to me.

     One of the problems in the world today is that no one wants to accept responsibility.  Everyone wants to blame someone else for their problems.  The Commission is demanding that the instructor take the blame when the student will not expend the effort that is required to study enough outside of class to pass the North Carolina real estate exam.  This is not fair.  This is not accurate.  This is not necessary.

     A perfect example of this is in class attendance.  It is extremely rare that a student that fails my real estate school exam was 100% in attendance.  More likely that failing student missed two nights of class and left early on a third night.  The Commission measures my performance based on the actions of someone that can not even get to class every night.  This is so obviously wrong.

     The Commission does not need to evaluate real estate instructors based on the performance of their students.  The Commission does not need to evaluate instructors at all.  The market will evaluate the real estate instructors.  If an instructor is bad, he will soon find himself with no students.  If you need an example of that, notice that First Real Estate School is the only school teaching pre license classes in Hendersonville.  Before I arrived in May 2016, there was someone else.  He is gone.  I had forty students in my last night class.

     Evaluating the quality of potential instructors is not the job of the Commission.  This does not in any way protect the public.  There is nothing wrong with a dull, boring, monotone, humorless, instructor that says AH ten times per minute.  If listening to an instructor like that would cause harm, I would have died in high school.

     The marketplace will get rid of bad instructors.  This is not a job for the Commission.

     Please repeal item 5 and 6 from 58 H 0303.  or what ever the rule is that requires the Commission to evaluate real estate instructors based on the performance of others.

     The Commission does not evaluate real estate brokers.  Can you imagine a rule requiring real estate brokers to send in a video of their listing presentation with special emphasis on how well he presented the WWREA brochure at first substantial contact.  Then if Mr. Broker only listed  two out of ten prospects, DISCIPLINARY ACTION.  We don't need the Commission to do that.  The market does it.  The market will do it for real estate instructors. Please  repeal 5 and 6 of 58 H 0303.

     Thank you for taking the time to hear me out.  Remember MLS seemed like a far out idea in 1957.  Letting the marketplace decide about instructors may seem far out.  Once you stop wasting time evaluating real estate instructors, you will wonder why you ever did it.

Tuesday, September 18, 2018

The North Carolina Real Estate Exam Pass Fail Statistics for August 2018

The North Carolina Real Estate Commission just released last month's results for the North Carolina real estate exam.  Here is the news.  In August 2018, six hundred and fifty one real estate license applicants took the North Carolina real estate exam for the first time.  Three hundred and ninety two of those test takers passed.  Two hundred and fifty nine of these real estate license candidates will be paying $164 to try again.  It costs $164 every time a candidate takes the North Carolina real estate exam.  It is a good idea to pass it the first time.  As you can see, in August, only sixty per cent of the exam takers passed it the first time.  Do not underestimate the North Carolina real estate exam.  It is tough. 

     Also in August 2018, one hundred and sixty two repeat test takers took the North Carolina real estate exam for the second or third or fourth or fifth try.  Thirty one of these of these repeat exam takers passed.  That is 19% pass rate.
Pass the North Carolina real estate exam the first time.  

     If you mistakenly believe that the North Carolina real estate exam is easy, think again.  It is not easy.  It is not inexpensive.

     North Carolina probably has the lowest pass rate in America.  The North Carolina real estate exam is a two part exam.  One hundred questions are the "national" portion of the exam.  These are questions that would be answered the same in all fifty states.  This would be questions like. "What is the CFPB?".   The answer would be the same no matter what state you are in.  Forty questions on the North Carolina real estate exam are questions that are unique to North Carolina.  These are questions like,"What is the Machinery Act?".   The other forty nine  states probably do not have a Machinery Act.  A real estate license applicant needs to get 29 of these 40 questions correct to pass the North Carolina portion of the exam.  Of the thirty seven  real estate license applicants that took the exam last month as a repeat test taker at an expense of $164, twenty five of them passed.  That is 68%.

      If you are soon taking the North Carolina  real estate exam, please heed my advice .  OVERSTUDY!    I has been my observation from thirty years of teaching real estate classes that most students want to study just enough to baaaaaarely pass.  May I suggest that you study with an attitude that you want to make 100% on the North Carolina real estate  exam.  Study like you want to get an A plus on the North Carolina exam.  If you fall short of your goal, you will still pass and get a North Carolina real estate license.

     Here is a list of links that I have to help anyone pass the North Carolina real estate exam.  If you are having trouble with any of the math, I have it on You Tube.  This is one of a dozen videos to help you understand the real estate math on the North Carolina real estate exam.

     If you have NOT read Appendix A in your text book, you have very little chance of  passing the "North Carolina " portion of the exam.  This is DULL reading.   I have read it to you on You Tube.  Check it out.   I apologize that I can not make this as interesting as a Tom Clancy novel.  When you get to the North Carolina portion of the exam, you will be glad that you sat and listened to me or followed along in the book.  Twenty five of the questions come right off these pages.  Watch all seven of the videos or read Appendix A yourself several times.  Save yourself $164.

     Go back in this same blog and read some of my other posts.  Most of what I write about is about passing the North Carolina real estate exam.  Here is one of my most unique posts.   I hope you read this post about trick questions.  Stay in touch with your classmates.  Study together.  Find out when your classmates are taking the exam.  Call them a few hours later and congradulate them on passing.

     If you think you are ready to go spend $164 and "give it a try", take my practice test at  This is a 100 question test with me explaining the answers on video.  It is definetly worthwhile.

     Here is a video with just some general tips on passing the real estate exam the first time.   Listen to these tips and implement them.  If you don't have contact info for your classmates, get it and stay in touch.

     It costs $164 every time that you take the North Carolina real estate exam.  Pass the first

Saturday, September 15, 2018

What To Do When the Real Estate Appraisal Comes in Low in Hendersonville, N.C.

      Mr. Seller's Realtor advises him to list his house for $275,000.  Mr. Seller insists on a $300,000 price.  After a long wait and several rejected offers, Mr. Seller finally gets a $295,000 offer.  He accepts it.

     He congratulates himself for hanging tough and getting the top price. Then the real estate appraiser from the bank shows up to appraise the house.  Mr. Seller points out to him that his rafters are made of 2x8 lumber.  Mr. Seller points out that the nails are extra heavy duty galvanized nails.  Mr. Seller points out several features that his house has that other "ordinary" houses do not have.

     A few days later the appraisal comes back at $269,000.  WHAT!   Is this appraiser crazy?   Mr. Seller showed him all the extras that his house has.  Didn't he see the electric garage door opener with the remote control?

      The first thing Mr. Seller needs to do is get mad.  He needs to call his Realtor and let him know how mad he is.  He needs to let his Realtor know that he knows that real estate appraiser is an idiot.  He needs to tell his Realtor that surely his house is worth $295,000.  The buyer is willing to pay that for it.

     Mr. Seller's first question is probably," Who picked that appraiser?" .  Unfortunately, the answer to that question will usually bring Mr. Seller no peace. Mr. Appraiser was chosen by the bank to protect the bank's interest.

     If Mr. Appraiser says  the house is worth $269,000, the bank is comfortable loaning Mr. Buyer $215,200 or 80% of the value of the house.  Mr. Buyer wants to borrow $236,000 or 80% of $295,000.  Mr. Buyer has scraped up every penny he can to get the $59,000 down payment  together.

     BUT Mr. Appraiser says that the house is only worth $269,000.  What does he know???   Mr. Seller believes that he knows more about property values in Hendersonville North Carolina  than Mr. Appraiser knows.  So what if Mr. Appraiser has been to appraisal school?  So what if Mr. Appraiser looks at more houses in a month than Mr. Seller has looked at in a lifetime?  So what if Mr. Appraiser has been appraising real estate  for 17 years?   So what if Mr. Appraiser has some fancy initials after his name?  So what if Mr. Appraiser is considered to be an expert real estate appraiser?  Who cares about all those credentials?

     After Mr. Seller gets over being mad, he can ask his Realtor for some advice. What can we do to save this transaction?

     We can ask the buyer to pay $295,000 for this house even though the expert real estate appraiser declares that it is only worth $269,000.

     There are two problems with this.  The first problem is that since the house is appraised for $269,000, the buyer has to have $79,800 for a down payment.  That is $295,000, the price, minus the $215,200 that the bank is willing to loan on this house that the bank knows is only worth $269,000.  The bank will loan 80% of the price or the appraisal whichever is lower.
Trying to sell your property for more than it is worth rarely works

     The other problem is that the buyer, not only has to come up with $20,000 more down payment.  The buyer has to sign a form that admits he is certified stupid.  The buyer has to sign a form acknowledging that he is aware that the house was appraised by an expect real estate appraiser for $269,000 but he is buying it for $295,000.  Who would do that?  Only a stupid person would do that. 

     If the seller and the Realtors are lucky, Mr. Buyer will do that IF HE IS ABLE.  He has to have the extra $20,000 to make this happen.  Mr. Buyer says, "I don't care what the experts say.  My wife loves this house and we are buying it."  Let's go to closing.  Sometimes it happens this way.

     More often, this deal dies.  Several months later Mr. Seller accepts a $269,000 offer from another buyer.  We go to closing.   Several months can be a long time if you are making payments on an empty house and paying taxes and HOA dues on an empty house and insuring an empty house and paying utility bills on an empty house. 

     If Mr. Seller's  Realtor advises Mr. Seller to lower the price  and if an expert appraiser that has already been paid advises Mr. Seller to lower the price and if several offerors (buyers) advise Mr. Seller to lower his price and his current buyer that obviously loves the  house but does not have an extra twenty grand advises Mr. Seller to lower the price, maaaaaaaaaaybe  Mr. Seller should start to believe what the entire market is telling him.  His house is not worth $300,000. 

     Price your house right.  It will sell.  Do not depend on "We might get lucky."  for the largest transaction of your life.  No matter how good your Realtor is, he is not good enough to sell your property for more than it is worth. 

    If I can help you with any real estate advise call me at 828 755 6996.