Simplify estate agent qualifications for transformation

Simplify estate agent qualifications for transformation

MAIN IMAGE: Jan le Roux, CE Rebosa; Samuel Seeff, chairman of the Seeff Property Group

Rebosa (Real Estate Business Owners of South Africa) calls on the Minister of Human Settlements for an urgent revamp and simplification of the estate agency qualification framework to accelerate transformation in the industry.

The retention of interns is an industry-wide problem in the real estate industry says Jan le Roux, chief executive of Rebosa. He says currently there are 25 000 intern agents, representing half of all individuals in the industry. A third (33%) of these interns are BEE candidates but many might end up leaving the industry. The high drop-out rate especially among BEE interns is concerning as it hampers transformation of this sector.

According to Le Roux there are many interns who already exceed the maximum two-year period to qualify with some exceeding six years. Few of these will go on to complete the NQF5 qualification to become principal agents or business owners due to the cost, time and cumbersome requirements.

Current framework is counter-productive

Samuel Seeff, chairman of the Seeff Property Group and a director of Rebosa, says the current educational framework involves an inordinate amount of paperwork, duplication and time wasting. An agent must register with an estate agency as an intern, complete a 12-month internship under active supervision of a principal or full status estate agent, submit a Portfolio of Evidence (logbook), complete the NQF4 Real Estate qualification and then pass the PDE4 professional designation exam. To qualify as a principal, you need to pass the PDE5 exam.

“It can take a few years and entrepreneurs from other industries shun the profession because of this. While the original objective was and is laudable, it has not produced the desired results,” says Seeff.

He explains that there is a lot of duplication between the NQF4 and Logbook and both take up substantial time which could be more productively spent. Although logbooks serve a purpose, it has become common practice for interns to copy logbooks. The submission, storage and the evaluation of logbooks are equally problematic. Seeff says further that the PDE4 subject matter to test competency is deficient and only requires a low pass across three sections. He suggests that more appropriate content could better prepare agents for a career in real estate.

Le Roux adds that there are also significant assessment challenges and bottlenecks caused by a shortage of qualified external independent moderators and assessors required by training service providers to uphold learner results. Furthermore, the Services Seta (SSETA) has limited verifiers for real estate which causes long delays in obtaining results and certification.

New way of thinking needed

Seeff says working with organised industry is vital to ensure the framework is informed by practical experience and is outcomes driven. The industry is entrepreneurial-driven and offers excellent employment and own-business opportunities, but the barriers to entry are prohibitive.

REBOSA proposes that candidates write the PDE4 and PDE5 exams before entering the industry, while still working in another sector or while studying at university or school. The EAAB would provide the learning material and at least four exams per year.

Upon joining an estate agency, the candidate would then complete a practical training course within six months of being issued with a Fidelity Fund Certificate (FFC), failing which the FFC is withdrawn. During this time, all contracts and mandates must be co-signed by a qualified property practitioner.

“This would be an improvement on the current supervision process. Without this onerous burden, candidates can immediately start earning an income. Those with a PDE5 could then upon completion operate as principal agents or become business owners much sooner,” says Le Roux.

According to Le Roux this process will enable the current 25 000 interns to complete the course and qualify as property practitioners within four to six months. This will immediately boost the income of the EAAB as qualified agents pay a higher annual fee than interns. More importantly, transformation can accelerate as thousands of BEE candidates could quickly pass the PDE4 exam, enter the industry and start earning an income while being able to qualify within six months.

“Thousands more can complete the PDE5 exam enabling them to become principal agents and business owners. Those trading illegally then also have an option of a fast and practical way to become legal,” concludes Le Roux.

Showing 5 comments
  • Hans Snyman

    I hope someone at the EAAB reads and understands what is proposed and takes it to heart. This will be good for the whole industry.

  • Refilwe

    So profound

  • James Otter

    I assess and moderate the NQF4 and 5 qualifications. Whilst the educational programmes could be improved; the study material has nothing to do with transformation. The Services SETA polices and manages the qualifications, not the EAAB. The EAAB sets and manages the PDE examinations. I can tell you that many black people complete the qualifications. The only difference is that many of them don’t have a computer and handwrite their work, but it is still good and more likely to be original. The problem facing most black candidates is not passing SAQA 4 and 5, it is earning a living from real estate after completing them.

    The transformation in due course will come from racial integration. The residential property market comprises property that is recorded in the Deeds Office, and business is conducted legally and formally. The owners are, for the most part, white with a minority that is non-white who have chosen to live in such neighbourhoods. There is potentially a huge market of residences owned and occupied by black people where the Deeds Office has not been involved, and the property is bought and sold informally. As far as estate agency is concerned, this market sector is seen as being dysfunctional. If this dysfunctional market is made functional, the transformation will improve, but the cash flow model will shift to that of the formal functional market.

    A negative factor is the cash flow model and the manner of the remuneration of agents. Commission paid on registration of transfer creates a capital barrier to agents, employees or would-be principals. A delay of three to four months before getting paid is a major deterrent to entry into the business. The big REBOSA agents who claim to have financial clout could pay new practitioners a basic salary plus commission to overcome this barrier.

    The Estate Agency Affairs Board has drawn attention to the transformation issue. Rather than sledging the EAAB would it not be more constructive to hold discussions with the EAAB to collaborate with them to bring about transformation? The problem as I see it is a large dysfunctional market sector and a punitive cashflow model that need to be addressed to give rise to improved transformation.

    A further issue that requires consideration is the number of property practitioners and interns necessary to service the property market. Before the introduction of the qualifications and the long depressed market, every man (and woman) and his/her dog were estate agents. It was a job of last resort. The initiative for converting it into a profession of sorts must go to an unpopular leader of the EAAB.

  • Marjolein Degens

    I completely agree with James Otter. The ‘informal’ property market should be transformed as he mentioned. This also to protect the consumers ( buyers. sellers) in this market. Education of estate agents is key but could be more efficient by skipping the LOG book. NQF 4 and 5 and PDE 4 and 5 are offering excellent study material. Providing interns a first year basic salary from the agency they start working with, is an excellent idea to get these people up and running in the property market. The agencies could ask in return a five year loyalty work agreement and adjust the commission split to X %.
    All stakeholders should communicate and be transparent about their objectives and aims for the new year 2021 and COMMUNICATE with each other.

  • Lesley Penn

    A one year internship is essential, as all aspects of real estate cannot be effectively covered in 6 months. The 1 yr logbook should be scrapped and replaced by the NQF4. This would avoid wasting time and money, and doubling up of the same information. The NQF4 information should be relevant to the market. The EAAB handbook should be upgraded, as much of the jnfo is dated and obsolete. The least the EAAB could do is update their decade-old handbook, by incorporating the new codes, acts and legislation. The old handbook has plenty of dated misinformation, forcing learners to glean the correct information from Google. C’mon EAAB, do your job or be gone.

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