Estate agent education needs urgent renewal
MAIN IMAGE: Joseph Sakoneka, CEO of the National Property Practitioners Council (NPPC); Samuel Seeff, chairman of the Seeff Property Group
Urban settlements, rural housing developments and housing estates will always be part of the economy and especially the South African real estate landscape.
Estate agents are the driving force in this important sector of the South African economy and to be able to provide a specialist and professional service to both the public and private sector, training is of the utmost importance.
The property sector is continuously growing with local and foreign investors eyeing South African property and leaping at opportunities to purchase some of the best property the country has to offer. Hand in hand with this interest is the fact that South African property legislation is becoming more involved and estate agents have to deal with a myriad number of acts and regulations governing their environment.
Various compulsory certificates and qualifications are deemed necessary to enable to create and maintain a professional service.
The Estate Agency Affairs Board (EAAB) governs these training and education requirements in terms of regulation four (4). But, according to Joseph Sakoneka, CEO of the National Property Practitioners Council (NPPC), some of these training requirements are outdated and are not being implemented to the benefit of estate agents or the industry at large.
“In order to qualify as an estate agent under the current and future education and training dispensation, an individual must be in the employ of an existing estate agency as an intern estate agent. Then the agent is required to complete a 12-month internship under active supervision of a principal or full status estate agent with FFC history of three years and has been issued with the current year fidelity fund certificate (FFC). While the intern estate agent is undergoing the 12-months internship, she or he is also required to complete Further Education and Training Certificate (FETC): Real Estate (SAQA QUAL ID 59097) also known as NQF 4 Real Estate qualification.
“Furthermore, the intern estate agent must submit a portfolio of evidence (PoE) or a 109-page Logbook and also pass the Professional Designation Exam ‘PDE 4’. All these requirements are laudable but have not produced the desired results.
“Approximately 25,000 individuals, which is more than 50% of the entire industry, are presently registered as intern agents and many have been registered as such for way more than the maximum period of two years – in some cases this period even exceeds 6 years.
“The requirement to maintain and regularly complete logbooks correctly has served a purpose, but it has become the practice of interns to copy logbooks. The submission of logbooks, storage and the evaluation thereof are equally problematic,” Sakoneka said.
According to him, the PDE 4 subject matter to test competency is deficient and only requires a 50% pass rate across 3 sections. It is therefore of the utmost importance to create more appropriate content that could better prepare the agents for a career in real estate.
“At the same time, only a small number of Black practitioners complete NQF 5 and PDE 4 to become principals estate agents due to cost, time constraints amongst other challenges. Bottlenecks are caused by the insufficient number of qualified external independent moderators and assessors required by training service providers to assess and moderate learner results.
“The SSETA has limited number of moderators for real estate moderation causing long lead times in issuance of qualification certificates.”
He argues there are several changes that could be made to the training structure to enhance the system and to support new-comer estate agents to obtain access to the market quicker, while being qualified to the set standards.
These options include:
- The authority (EAAB) commissions a new and more appropriate PDE in consultation with organised industry. Until the finalisation of a new PDE the existing content will apply. NQF 4 and 5 falls away.
- The individual obtains the study material from the EAAB and writes the exam which is made possible at least four times in EAAB’s April-March financial year. This can be done before the individual joins any business broker (estate agency), i.e. while working in another sector or studying at university/school.
- Having passed the PDE the individual registers with a business property practitioner as a qualified agent who can act as such with immediate effect.
- The individual must complete a practical training course within six (6) months of being issued an FFC failing which the FFC is withdrawn. All contracts and mandates must for this period be co-signed by a qualified property practitioner.
- Individuals can study for and pass PDE 5 immediately after passing PDE 4 (both exams can be done before registering as a practitioner).
“Implementing these regulatory guidelines provide a number of positive outcomes that will benefit both the industry and the agents. Individuals can not only qualify before joining the industry but can also start earning an income with immediate effect.
“The almost 25 000 interns can complete the qualification within four (4) to six (6) months and become qualified property practitioners. This will also boost the income of the regulator as qualified agents pay a higher annual fee than interns.
“A further positive outcome that will be reached, and which is of great importance to the industry, is that transformation will be significantly advanced as 33% of all interns are black. Barriers to entry will be lowered as the cost to obtain the NQF qualification from a registered training service provider is prohibitive thus preventing many PDI’s from entering the industry,” he said.
According to Sakoneka thousands of illegal agents can enter the industry within a matter of months instead of the current much longer and cumbersome procedure which many refuse to adhere to. Principalisation, or agents becoming principals and business owners, will be boosted.
These regulations can also ensure that more professional individuals can become practitioners because many are not prepared to follow the long and onerous road to entry.
“Urgent progress is required to accelerate transformation of the industry. It is clear that Black individuals experience almost insurmountable obstacles in becoming successful property practitioners. It is vital that the regulator takes the necessary steps to ensure that obstacles be eliminated as far as possible. Educational requirements are one such obstacle.”
Samuel Seeff, chairman of the Seeff Property Group, said there can be no doubt that the real estate sector is an important economic contributor and job creator.
“It also lags in terms of BEE. Experience in the industry shows that a key reason for this is the onerous qualifications that people need to comply with while they are struggling to earn a living. It is simply not sustainable for BEE candidates and other newcomers to stay in the industry for long enough to start making a decent living.
“Remember, estate agent remuneration is generally commission-based, and it can take at least three months, and often longer, to earn your first pay cheque. I strongly call for an overhaul of the educational requirements. In that way newcomers, especially BEE candidates, can be fast tracked into the industry. It needs to be easier, not harder, for such an important economic sector to function,”Seeff said.