LESS PLACE FOR WANNABES
PUBLISHED 2 NOV 2007


Near-manic consumer demand during South Africa’s real estate boom, which peaked in 2004, impacted on the country’s property sector in a number of ways.

It depleted stock levels to record lows, which in turn encouraged sellers to set premium prices -and saw buyers pay them - says Mike Bester, CEO of Realty 1 International Property Group. In so doing, entry level affordability was dealt a harsh blow, while the average middle market price soared, hitting R950 000 in September, according to Absa.

It also caused a proliferation of estate agent wannabes, many of whom lacked even the most basic training and skills, yet managed to make a living out of the market because it was essentially driving itself at that time.

With stock levels up again, buying activity down and consumers reeling from a series of interest rate hikes and the implementation of tough new credit legislation, however, today’s market is becoming increasingly intolerant of agents who do not add value to both the marketing and selling processes, says Bester.

According to a spokesperson for the Estate Agency Affairs Board (EAAB), the number of registered estate agents exceeded 84 000 in September this year but Bester says this figure is likely to start reducing as market conditions become more exacting. “While properties tended to sell themselves during the heydays, sometimes for more than the original asking price, we’ve entered a buyer’s market in which stock, particularly in the middle and upper markets, is fairly plentiful. It’s also a market in which negotiations between buyer and seller have become the norm and properties are frequently selling for less than asking price.”

This altered state of the market, further characterized by rising levels of buyer and seller knowledge of real estate, is putting the spotlight directly on agents’ abilities, he says, which will ultimately lead to under-trained and less-than-committed operators falling by the wayside.

Says Bester: “Deal brokering has become a major feature of the current property market, with sellers and buyers increasingly relying on professionals to put together deals and make them work. Having a willing buyer and a willing seller is only half the recipe of a successful sale today – it also requires a high level of skill on the part of the agent in terms of being able to find a common meeting place between the two parties.”

He continues: “Today’s successful buyers and sellers have become those who elect to work with educated professionals whose ability extends far beyond listing a property or showing people around. While charging similar commissions to those of the hacks, they have the skills to separate lookers from buyers, filter phone calls and create excitement around their property listings.”

They are also knowledgeable about the neighbourhood and the local market, and therefore able to assist sellers with pricing and marketing plans, and buyers with relevant advice. In addition, they work within an established infrastructure that offers not only an effective administrative system but also an active website and internet-based marketing, he says. “They also have access to expert advice in all related sectors, from conveyancing attorneys to mortgage originators.”

“This is the agent buyers and sellers need to secure to create the requisite negotiating environment in which deals are successfully closed. This is also the agent who will be there for them long after the contract is signed,” Bester emphasizes.