Major shifts coming in real estate industry

More than 70% of agents support the new education dispensation for the real estate industry and believe it will make the industry more professional and credible.

However, a new survey shows, about 23% also believe that the new qualification requirements will cause the industry to lose many good agents who don’t want to write exams after many years in successful practice – and 8% are in fact already leaving or planning to do so in January 2012 when the deadline for obtaining the new qualifications expires.

Nevertheless, says Dr Willie Marais, national president of the Institute of Estate Agents (IEASA), the survey also reflects that 64% of agents are already committed to try to comply with the new dispensation, despite the considerable cost involved (up to R12 000 per agent) and the investment of time required.

“And that is not really surprising, because most agents clearly recognize the value of training. As the survey also shows, 78% of agents currently registered to practice have passed the existing Estate Agency Affairs Board (EAAB) exam, and no less than 90% have received additional career training either in-house or from an external trainer.

“What is more, most agents start out on a pretty sound educational footing anyway. The survey shows that 94% have matric and that almost half (49%) also have a tertiary or post-graduate qualification.”

But, he says, the new legislation governing training in the real estate industry combined with the huge drop in agent numbers over the past two years does indicate that it is going to become more challenging for estate agencies to recruit and retain top performers.

“We see that company investment in agent training will have to escalate and that these costs plus competitive remuneration for top performers will put extra pressure on profit margins. Agencies will thus have to pay careful attention to their cost structures.

“It will also be more difficult for small agencies to obtain and train new recruits, but this does not mean the disappearance of such businesses. Top agents’ income potential will escalate and many may prefer to strike out on their own in niche markets. It is not too unrealistic to speculate that the majority of agents will continue to work for smaller, independent agencies, as they do now (74%).”

The just-released survey of the industry was conducted by an independent researcher with the backing of IEASA and Property24 as well as the EAAB. It is only the second such poll ever conducted, the first having been completed in 2004.

Distributed to 42 000 agents registered with the EAAB, the survey probed a wide range of characteristics of agents and agencies, including demographics and compensation structures as well as business activities and technology usage, and although participation was entirely voluntary, it drew a strong response.

This revealed among other things that the typical SA agent is aged between 35 and 55 (54%); married with two children (72%) and earns R13 000 or less a month (54%) by working on a commission-split basis (74%).

Article by: www.ieasa.co.za