Agents ‘deserve’ 7 percent
AGENTS deserve their commissions more than ever, says Linda Erasmus, CEO of Fine & Country SA in response to the question whether or not estate agents should lower their commission fees in line with the general depreciation of the market.
“The number of successful real estate sales has diminished significantly since the heydays of 2005 and 2006 and the underachievement of asking prices has, to a large extent, become the norm.
“Agent fees which commonly run at 6 percent and 7 percent have come under the spotlight. It is difficult for agents to successfully conclude sales in the current climate.”
Further compounding this already difficult situation is the new legislation imposed by the Estate Agents Affairs Board of South Africa last year.
The introduction of this legislation, coupled with a weak property market, saw estate agents leave the industry in droves. As it stands, Erasmus said, the real estate agent complement had dwindled from 80 000 at the beginning of 1996 to 30 000 in 2009.
“The fact that a large proportion of independent agents have gravitated to the big property companies is also indicative of the trading conditions.”
Until July 2008, anyone who could afford the registration fee to enter the property industry could do so without any qualification and could operate under minimum supervision as a “candidate estate agent”.
After a year, candidates were deemed to be “qualified” without any assessment to verify this. Furthermore, agents were under no obligation to maintain their professional skills or keep their knowledge up to date.
She said South African real estate agents and the services they performed were often taken for granted. “Real estate agents work entirely from a commission base and have to carry their own expenses. They are also closely involved with every aspect of a deal, which takes time and effort.
“Agents also cover all the costly off-and online marketing and networking expenses pertaining to sales; weekends are often sacrificed and long hours are also the norm.
“South African agents are working harder for less, yet are providing a professional service amid tough trading conditions. Pay them what they deserve,” Erasmus said.