I noticed a very disturbing trend in Utah real estate pass rates over the last six months. And this is very concerning to me. The real estate school that you choose to get your real estate license matters a lot. There are a lot of different options out there, and they have different programs, different ways for you to get your education. And you have to pass your license exam to get your license.
And so, we all prepare people differently. We all prepare our students in different ways. And here at the Institute of Real Estate Education, we have worked very hard to have a program that helps people very well. In fact, our pass rate for the Institute of Real Estate is 80% over the last six months and over the last ten years, really.
But those are my most recent stats, where nearly every month we were over an 80% pass rate, sometimes almost into the 90s, sometimes just a little below 80, but almost always right there above 80%. And that’s an anomaly. That’s an unusually high pass rate here in Utah. Do you want to know why?
The Average Pass Rates in Utah
I was looking at the state pass rates for all other schools combined. Now, in the past, the state pass rate hasn’t been great. It’s been about 55% of people passing the license exam on their first try for all schools throughout all of Utah. That’s why I really am proud of our 80% pass rate. But over the last six months, it has dipped lower and lower, and on average over the last six months, the state pass rate has been around 45%.
That’s a 10% drop from where it was. That is huge. That is a big drop. So why is this happening? Why is the statewide pass rate falling? Now, I did see a couple of things in the industry.
For example, this year, there was a new school that entered the market. It’s probably not them. I’m not sure how long they’ve been there, but they don’t probably have too many new students taking the exam, so it’s probably not them. I think they started about five months ago and so probably too soon to see their stats in this.
A Possible Cause for Falling Pass Rates
But if we look at some other schools in the Utah market, like one of the major schools in Utah was recently sold to a national company. And I know second hand that they removed all of the content that the original Utah owned school had created and provided. And they replaced that with their own content and their own version of the real estate course, and because they are a big market player, that is potentially a big reason why the pass rate has suffered, because their content doesn’t have that local Utah knowledge and touch.
And potentially they are not providing that same service that we wish they did. And it’s unfortunate you’ll find that a lot of times a big company will come in with a big budget and a big marketing budget, and they’ll draw a lot of people in with their good marketing, but their product doesn’t hold up to that scrutiny. It doesn’t show the success that they would have.
Why Real Estate Schools Don’t Get as Many Negative Reviews
Now, there’s a little bit of a bias in those reviews for people who review real estate schools, because if I’m trying to do something and I fail, if I try to get a real estate license and I fail the exam, that creates an environment where I’m embarrassed, I’m not going to tell the world that I went in and failed.
And so, you don’t see a lot of negative reviews for schools that don’t do a good job of helping people to achieve the license that they wanted to achieve. Instead, only the people who did succeed want to go out and give a review and say, “Hey, I succeeded. And look, the school was okay because they helped me do that.”
And so, there’s a little bit of selection bias in the reviews we see from real estate schools, where the ones who are not performing as well, even though they’re drawing in a lot of students, we don’t see those reviews percolate out into the public. So, it’s a little difficult to know the quality of a good real estate school other than what they tell you.
Another Trouble with Reviews
And another way that we have difficulty determining if one school is better than another is when you go and get your real estate license, you typically only attend one school. You know, you don’t attend three different schools and say, “I like this one the best.” Not like restaurants where you go to like five restaurants and say, “Oh, this restaurant’s the best,” right?
When it comes to education, where you have to spend 120 hours, where you have to spend a lot of your time and effort to do something, you’re not going to go to another place and do that again, you know? So, we don’t have hardly anybody who does more than one course and can compare the two. So again, we can only see what the one person’s experience was and only the people who did well are going to submit a review for that. And I’m sure my own students have a similar issue.
But this is where it’s so important that real estate agents refer the right schools, the ones that have the super high pass rates. And we try to direct people to their best path, and then the best schools will succeed. And the schools that need to do better hopefully will step up their game and make a better product and do better for their students.
Here’s hoping. I don’t like this trend that the national pass rate is going down, but luckily my own pass rate, the Institute of Real Estate Education, is still mighty strong at our 80%. So, we are succeeding where it appears others are starting to slide. Let’s lift everybody up. Let’s help them all to be better. And let’s make sure that students get the best education they can.