All states and the District of Columbia require real estate agents to be licensed, but only half of all states conduct background checks, according to the Association of Real Estate License Law Officials. States that do conduct checks may not delve that deeply into an agent's background. It is up to you, as a consumer, to research and check the backgrounds of potential real estate agents and brokers. If you do not conduct a background check, you may end up with an agent who is unlicensed, unethical and unqualified to help you make one of the biggest purchases, or sales, of your life.
Research State Policies
Every state has a different process for vetting real estate agents. A state's background check may consist of little more than a questionnaire about the agent's legal history, or it could be more thorough, involving everything from fingerprinting to searching for the agent in criminal databases. You should research the policy of your state to determine whether or not a sufficient background check has been conducted. If your state performs extensive research prior to issuing a license, the background check you conduct yourself might not have to be as thorough.
Check for Legal Offenses
Legal offenses may not prevent a real estate agent from obtaining or keeping a real estate license. Most states have a rehabilitation statute that allows agents to have a license if they have completed counseling or another suitable rehabilitation program. This means that your real estate agent might have a criminal background. If that concerns you, services are available that can help you do a criminal history check for a small fee. Examples of these services include CriminalSearches.com or CertifiedBackground.com. Past offenses that may be especially bothersome to home buyers and sellers include fraud, financial crimes or violent crimes.
Check for Disciplinary Action
Most states have a Department of Financial and Professional Regulation that oversees real estate agents and other professionals as well as financial institutions like banks and credit unions. You can contact this department to make sure the agent's license is up to date. The state department can also tell you whether or not the agent has been the subject of disciplinary action. Real estate agents can be disciplined for conducting real estate activities without being properly licensed, participating in unlawful loan modification activities, violating the Subdivided Lands Act and participating in unlawful acts involving short sale transactions, just to name a few.
Search the Sex-Offender Registry
Your state's sex-offender registry may not be the first resource you consider when conducting a background check on a real estate agent, but this tool should not be discounted. Susan Hofer, an Illinois Department of Financial and Professional Regulation spokeswoman, told the "Chicago Tribune" that a recent state-issued check of professionals in Illinois turned up 66 real estate salespeople and 20 real estate brokers whose names appeared on the sex-offender list. Conducting a check on your state's registry is free and easy through the Internet. All you need is the real estate agent's name.
- U.S. Bureau of Labor Statistics: Real Estate Brokers and Sales Agents: How to Become a Real Estate Broker or Sales Agent
- Chicago Tribune: Don't Be Afraid to Kick the Tires When Picking a Real Estate Agent
- PC World: How to Run an Online Background Check for Free
- Michigan State Police: Michigan Public Sex Offender Registry (PSOR)
- Illinois Department of Financial & Professional Regulation
- California Department of Consumer Affairs Bureau of Real Estate: Disciplinary Actions
- Siri Stafford/Digital Vision/Getty Images