Will new regulations simplify estate agent training?
MAIN IMAGE: Samuel Seeff, chairman of Seeff Property Group; Xoliswa Tini, CEO Xoliswa Tini Properties
One of the key questions for the real estate industry is whether the regulations to enact the Property Practitioners Act will simplify the onerous training requirements imposed on all prospective estate agents.
Principals see this every year. Eager young professionals join their agencies as intern agents but as time progress most of them drop out eventually. The pressure to complete the required NQF4 qualification while keeping up a logbook and simultaneously make sales to earn a living is simply too much to handle.
Real estate is a tough business and not everyone is suited for the rigours of this highly competitive sector, yet industry leaders have nonetheless flagged the current training system as one of the critical constraints to bringing more black estate agents on board.
Barrier to transformation
The toughest challenge faced by any intern agent is the fact that while obtaining their NQF4 qualification they have to complete a 12-month internship and logbook which leads to unnecessary duplication of effort according to Samuel Seeff, chairman of the Seeff Property Group. “There is no need for an internship and a logbook as well as the NQF4 qualification. It needs to be one or the other, not both,” he says.
In addition, most candidates can’t afford not to earn an income and so face further pressure to make sales. However, making sales happen is a time-consuming full-time job. Bear in mind that candidates only get paid once the property registers – a process which could take months. “It is no surprise that about without half of all the estate agents operating in the market are still sitting at “intern” status,” notes Seeff.
The high drop-out rate naturally also has a detrimental impact on bringing more agents from a previously disadvantaged background into the residential real estate sector. In March last year 40 949 Fidelity Fund certificates (FFCs) were issued, around 20 000 were issued to interns (EAAB March 2020), a third of which are estimated to be BEE. Most of them are expected to drop out. This has been identified by industry bodies like Rebosa and the National Property Practitioners Council (NPPC) as a major obstacle to effect faster transformation – an aspect that the industry has oft been criticised for. Consequently, both organisations made calls on government last year to consider simplifying the educational requirements for estate agents.
One of the suggestions Rebosa made was that candidates are allowed to complete their NQF4 and even the NQF5 while working elsewhere – thus allowing them to earn an income while obtaining the required educational qualifications. “Then, once qualified, they could enter the workplace and at least start working towards sales and earnings immediately. A period of practical training, working with a full status agent can still apply but must be for a short period,” explains Seeff, also a director of Rebosa.
Problem with ‘career interns’
Besides being a constraint to transformation, another problematic outcome of the current training system is interns who operate for years as full status agents. These so-called ‘career interns’ list properties without identifying themselves as intern agents on the property portals or on their business cards or e-mail signatures.
Xoliswa Tini, founder and CEO of Xoliswa Tini Properties, agrees that the current training framework is the biggest challenge facing the industry. However, she reckons there are not enough incentives in the system to compel interns to complete the NQF4 real estate qualification. “Anyone who wants a career can begin their NQF qualification, start a logbook and apply (and be granted) an FFC. Then a newcomer is ready to practice, earn an income and do the same work as full status agents,” says Tini. What is more, she adds, once these interns stop working as estate agents, their ‘registration’ with the Estate Agency Affairs Board (EAAB) is not terminated and their details remain on the EAAB database.
She suggests that intern agents should be paid a smaller commission split than full status agents as a means of motivating them to obtain full status. She also feels that all intern agents and the deals they make should take place under the supervision of a full status agent as mentor and that the period of internship should be shortened from 1 year to six months.
Her suggestions are similar to some that Rebosa made last year towards the simplification of the educational training programme. Besides the mentioned allowance to complete the NQF4 and NQF5 qualifications before entering an internship, they also made the following suggestions:
- That upon joining an estate agency, the candidate completes the practical training course within six months of being issued with an FFC – if unsuccessful the FFC be withdrawn.
- During these six months all contracts and mandates must be co-signed by a qualified property practitioner.
The frustrations in the real estate industry with the onerous training programme have been around for years. It is hoped that some of suggested changes to simplify the educational requirements will be reflected in the hopefully soon to be published regulations to the Property Practitioners Act before it will replace the current Estate Agency Affairs Act.