Find answers to key questions interns ask about the industry’s new education regulations
There is much confusion among new intern agents and principals as to the updated education requirements of the Estate Agency Affairs Board (EAAB). Any interns joining the real estate industry should become familiar with the Standard of Training of Estate Agent Regulations that came into effect in July 2008.
These say that all newcomers to the industry will be registered as interns, even if they are exempted from the academic qualifications (Further Education and Training Certificate – FETC – and National Certificate – NC – Real Estate NQF 4 and 5) due to having existing higher degrees. All interns – those registered from 1 January 2013 – will have to comply with requirements on completing a practical workplace logbook during the first 12-month internship.
WHAT DOES IT MEAN TO COMPLETE A LOGBOOK?
It means showing proof of your workplace experience in a number of practical tasks, such as:
• Listings completed
• Inspections done
• Show houses arranged with registers
• Mandates negotiated
• Sales/lease contracts concluded
• Property values established
• Agendas for and meetings/training attended
• Proof of time management and time/log sheets
Interns also need proof that they were trained and introduced to the basics of real estate. The prescribed EAAB logbook requires there to be a minimum of one week of real estate industry and office induction.
WHAT IS COVERED DURING THE INDUCTION AND ONE-YEAR INTERNSHIP?
These workplace sections (as indicated in the logbook) are included:
1. Compulsory induction: industry and office
2. Estate Agency Affairs Act and Code of Conduct
3. Real estate product and services
4. Legal environment – acts
5. Legal environment – contracts
6. Financial process FICA/tax/accounting
7. Marketing and selling/leasing – immovable property
8. Estate agency management
9. Agency administration and systems
10. Paralegal environment
WHO PARTICIPATES IN THE LOGBOOK?
You – as the intern agent – as well as your principal. The principal has a significant role in the completion of the logbook. He or she has to take the lead and mentor the new intern. The success of this process depends on having an intern and principal who are committed and motivated. They should both believe in and understand the value of the process. A full-status agent with a minimum of three years of consecutive valid Fidelity Fund Certificates (FFCs) can also fulfil the role as mentor.
WHICH TASKS ARE INCLUDED FOR INTERNS?
There are 10 recommended projects that tie in with the intern’s workplace experience. The intern may take on additional work but may not do less than these 10 projects:
1. Show product knowledge in a PowerPoint presentation
2. Develop a business plan
3. Develop a marketing plan using advertising
4. Compile an individual plan/goal
5. Draft an activities schedule
6. Analyse policies and procedures of real estate
7. Develop a proposal to enhance team performance
8. Undertake a research project on understanding financing options
9. Design a brochure on regulatory registration process and bonds
10. Complete a research project on Code of Conduct and ethics
WHAT SHOULD THE PRINCIPAL DO?
The principal needs to be familiar with the logbook requirements and then meet with the intern to plan activities and provide opportunities for workshops and training. The principal has to sign off logbooks/activities weekly and monthly. As per the logbook requirements, monthly appraisal reports should be completed to certify the intern’s readiness at the end of the internship year.
WHAT HAPPENS AFTER THE INTERNSHIP YEAR?
Ideally the intern agent registers with a Services SETA-accredited service provider to start the academic real estate qualification FETC: Real Estate NQF 4.
The ideal scenario is to complete the academic qualification simultaneously with the practical logbook in the workplace. The timeframe for completion is one year for the logbook and two years for the academic qualification.
IS THERE AN EXAM AFTER THE QUALIFICATION?
Yes. The Professional Designation Examination (PDE) 4 and 5 will be the final examination to prove that an agent is ready to operate in real estate. This four-hour openbook exam tests the application of knowledge, as well as the academic qualification completed.
CAN AN INTERN BE EXEMPTED FROM THE LOGBOOK AND EXAMS?
No. After the introduction of the Estate Agent Training Regulations in July 2008, there was a period where an agent who held an FFC in that capacity (for instance, an agent or principal) could apply for exemption dating five years back until 2003. But as of June 2015, all new interns have to follow the new procedure, keep a logbook and write the required exams (PDE 4 and 5).
CAN I BE EXEMPTED FROM THE FETC AND NC REAL ESTATE ACADEMIC QUALIFICATION?
Yes, if you have studied at a higher level before. With certain subjects and experience, you might be able to apply for exemption – there is an Exemption Matrix and procedure on the EAAB’s website that will give you an indication. Only the EAAB may grant exemption (if procedures are followed). It will be at the EAAB’s discretion to decide if you are eligible. This will not grant exemption from the logbook or PDE however.
WHAT IS THE TIMEFRAME FOR A NEW QUALIFIED AGENT OR PRINCIPAL TO BECOME OPERATIONAL?
For a new agent, it will take between two to three years to complete the whole process and for a principal, three to four years. An intern agent may sell property in the meantime, but no legal documentation – mandates or contracts – may be signed off without the presence of the principal or full-status agent. The new process to become a qualified agent is much more costly and takes longer to become fully operative.
But it’s a step in the right direction, with professional, registered designations as follows:
• PPRE – Professional Practitioner in Real Estate (PDE 4)
• MPRE – Master Practitioner in Real Estate (PDE 5)
WHAT OPTIONS EXIST AFTER THE EXAMS?
Continuing Professional Development (CPD) is the future in real estate, as it is in most other professional industries. This happens via road shows and seminars presented by the EAAB across South Africa on relevant topics including new legislation, changes, updates and amendments. It helps all agents and principals to stay abreast of ever-changing industry regulations relating to real estate, as well as new laws and acts.
DOES LOCAL REAL ESTATE HAVE A REAL FUTURE?
Yes. Finally we are becoming a professional industry; it’s no longer considered a weekend job. As entry requirements are costly and getting tougher, agents need to commit to making this their career of choice. They will have to spend time and expense to become properly qualified, but with hard work and perseverance, the opportunities in real estate are endless.
Jo-Anne Strydom has 21 years of real estate experience, initially as a sales agent before moving to training. She studied Real Estate Advanced Practices in Miami and is an accredited real estate assessor and moderator in South Africa.
Words Jo-Anne Strydom