Unemployment spikes estate agency business proliferation
The lucrative nature of the estate agency practice is attracting all manners of people into the profession, heightening fears that more Nigerians may fall prey to scams in the industry.
Considering the importance of housing in man’s hierarchy of needs and the huge deficit that exists in the housing sector, estate agents generally play a very important role in the socio-economic life of the country.
In Nigeria, practice of estate agency remains largely unorganised, unregulated and unprofessional, while majority of those who practice estate agency do so without the basic training in that field, without any certification or qualification and largely in an unprofessional manner.
Efforts by the Lagos State government through its Real Estate Regulatory Authority (LASRERA) to regulate the profession through a property law have not yielded much result. In other climes, estate agents hold an up-to-date professional accreditation and activities are regulated by various acts that aim to protect buyers, sellers, real estate agents and real estate brokers.
In the past one year, an extraordinary increase in estate agencies has been recorded, stoking competition between professional estate agencies from the Nigerian Institution of Estate Surveyors and Valuers (NIESV) and its affiliate Association of Estate Agents in Nigeria (AEAN), and from all sorts- lawyers, doctors, engineers, bankers, accountants, teachers and unemployed.
Though, the number of agencies in major cities and urban centres cannot be ascertained due to lack of data, the firms have grown remarkable in the last one year, as the number of professional members increased to 5,651; after Estate Surveyors and Valuers Registration Board of Nigeria added 648 persons to the register in the first time since the establishment of the board in 1975.
The Guardian learnt that part of the issues emerging from the profession is the discrepancy in the estate agency fees, new charges for registration and logistics for intending buyers and tenants. While the members of NIESV and AEAN charge 10 per cent commission on rentals and waive other charges, other agents vary their commissions up to 15 per cent per transaction and insist on registration and logistics payment.
For instance, an estate agent can earn between N200, 000- N300, 000 for renting a three-bedroom apartment in Ikeja or N500, 000-N1 million for a duplex/terrace house in Lekki Peninsula/Victoria Island in Lagos. Those selling houses or managing properties also make huge sums in transactions.
A past NIESV president, Mr. Emeka Eleh, said: “Due to the lack of a central professional/regulatory body that will set minimum standards for entry, set standards for its practice, as well as ensure adherence to a code of ethics, most estate agents are generally on their own and quackery with its attendant consequences is very prevalent, if not the order of the day.
Eleh, who pioneered the setting up of AEAN, as part of the strategy to rid the practice of quacks and train non-members to embrace the profession, explained that a multiplicity of local estate agents’ associations exists but these are essentially local bodies without either the right structure, leadership or plans to advance the practice of estate agency beyond the parochial interest of the founders or originators.
Former Chairman, NIESV’s Faculty of Estate Agency and Marketing, Mr. Sam Eboigbe, said the number of practitioners in estate agencies has increased over time because it is all-comers affair and the practice is not yet effectively regulated.
He said: “There is this absence of a central professional body with regulatory powers to set minimum standards for its practice and to ensure adherence to a code of ethics. So, many incursions have occurred with vendors and family members becoming estate agents.
“Those who have been displaced from work places go into the business since the exit and entry points have no boundaries. There is also the belief that the business of estate agencies is lucrative and that practitioners make it easily.
“Lately, the business of estate agencies has received tremendous online patronage. This is the new phase of the business and listings are circulated online, while deals are similarly consummated online. It is increasingly becoming difficult to achieve harmony in the practice since the emergence of online phenomenon anyways.”
He told The Guardian that estate agents, who are members of NIESV, are remunerated in line with the scale of professional charges as approved by the regulatory authority and professional scales of charges, which is usually 10 per cent of the rent.
NIESV Chairman, Lagos branch, Mr. Gbenga Ismail, who doubles as AEAN Vice Chairman, blamed the trend on unemployment, saying, “the nature of the economy in the past year has driven so many into the business. It has a very low entry barrier and as such, anyone can be an agent.”
He said: “AEAN is still vibrant and continuing to add to membership and training. We are also now globally affiliated with National Association of Realtors (NAR) in the USA.
“We collaborate with the government, especially Lagos State through LASRERA. We always participate and contribute to their continuous efforts to improve transaction and regulations.”
According to him, one of the ways to regulate is to emulate what Lagos State had done with LASRERA. “This body sets rules within the industry. The second is through bodies like NIESV and AEAN, which bring practitioners together through training and self-regulation,” he said,
To achieve professionalism in the sector, Eleh suggested a national body that will champion the establishment of training, certification and regulatory protocols for practitioners of estate agency; establishment of standardised prequalification and registration protocols for the prospective estate agents; keeping a register of all qualified and certified estate agents, as well as enforcing compliance to a code of ethics and practice through sanctions.
He said the proposed body should be established and implement mandatory training programmes for practitioners; pursue appropriate professional indemnity insurance programmes for members, ensure the protection of members of the public; set remuneration due to agents whether as single agents or cooperating agents and regulate the practice of estate agency;
Also, Eboigbe agreed on the need to urgently set up a regulatory body to oversee and checkmate the firms, who operate without rules. He said efforts should be made to bring together stakeholders to initiate proposals by way of a bill at the appropriate segment of the parliament and ensure the desired cooperation by the house members for it to sail through without delay.
“This would provide a constitutional and legal framework to achieve harmony just like we have in other climes. The role of government is essentially to enforce the law. However, we can’t enforce it until laws are in place,” he said.
Eboigbe appealed to the Federal Government to ensure the procedure for the passage of bills in the parliament is unbundled to make it less cumbersome as the legislative requirements can be frustrating in getting a bill across various stages. He added, “The government should also provide support in the enforcement of extant laws of existing institutions and agencies to discourage violations and sharp practices from quacks.”
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