PROFESSIONALIZING REAL ESTATE AGENCY PRACTICE IN
NIGERIA: ISSUES AND THE WAY FORWARD
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Professionalizing
is derived from the term Profession/Professional. A professional connotes a
person with a distinct competence for a specified function or discipline
(Ojewunmi, 2005). Such a person would have been trained or has acquired the
necessary training in that discipline to become a professional in that field. A
professional exists within the context of a profession; a distinct discipline
or career path with its own training, qualification and membership requirements
and standards. It is in the bid to establish such standards that professional
bodies exist to ensure that persons within its fold have the requisite
training/qualification and also abide by its rules and ethical standards (Kuye,
1998). A professional in any field is a highly regarded person and is deemed to
have a certain level of competence expected of a person in that profession.
Real
estate agency is essentially a land based profession that deals with the
business of buying, selling or leasing of interests in real estate, which may
be land or buildings or interests therein. Practitioners of this trade are
generally addressed as Estate Agents in our environment. Considering the
importance of housing in mans hierarchy of needs and the huge deficit that
exists in the housing sector in Nigeria, Real estate Agents generally play a
very important role in the socio-economic life of the country. Generally a real
estate agent is a person, who possesses the authority to act on behalf of
another person with a view to establishing contractual relationship between his
principal and a third party. The person, who employs the agent, is usually
called the Principal. Several variants of real estate Agent/Agency exist
(Olatunji, 2008).
The
practice of Real estate Agency in Nigeria at present remains largely unorganized,
unregulated and unprofessional. Apart from the Nigerian Institution of Estate
Surveyors and Valuers that has set standards for its practice by its members
i.e. Estate Surveyors and Valuers, the large majority of those who practice
estate agency do so without the basic training in that field, without any
certification or qualification, without any regulation and largely in an
unprofessional manner (Gambo & Ashen, 2012).
The
practice is generally open to all comers and entry and exit are at the sole discretion
of the person. Due to the lack of a central professional/regulatory body that
will set minimum standards for entry, set standards for its practice, as well
as ensure adherence to a code of ethics, most estate agents are generally on
their own and quackery with its attendant consequences is very prevalent if not
the order of the day (Gambo & Ashen, 2012). A multiplicity of local estate
agents Associations exists but these are essentially local bodies without the
right structure, leadership or plan to advance the practice of real estate
agency beyond the parochial interest of the founders or originators (Hemuka,
2002).
The
effects of this present state of real estate agency practice in Nigeria are
indeed too numerous to count. The major effects are that due to lack of
regulation and requisite competence on the part of the practitioners, the
consuming public has been on the receiving end of estate agents in terms of
very poor services, fraudulent transactions and losses of income through the
activities of dubious practitioners (Hunter, 1997). As
a result of this, the public perception of the real estate agent is very poor.
Real estate Agents are generally looked upon as persons, who engage in sharp
practices and whom you have to deal with, with “all eyes” open. In view of
this, the practitioners are not respected in the society. The very low level of
respect for the practitioners has led to a situation where both vendors and
landlords alike do not see the need to remunerate them appropriately, while the
lack of standardization and regulation has led to both the landlords and the
vendors turning themselves into agents. In most cases, multiple agents are
appointed and owing to lack of standardized practice procedures it usually
turns into a cut throat competition amongst them. The level of abortive work
done by the average real estate agent is phenomenally high due to the non
standardized practice procedure. The police, EFCC and other law enforcement
agencies are after the real estate agents in the belief that a lot of money
laundering is done through the acquisition of properties with illicitly
acquired wealth (Olatunji, 2008).
To
achieve professionalism in the practice of real estate agency in Nigeria, the
right approach will be to work towards ensuring that Real estate agents are
appropriately trained and certified to practice, establish standardized
prequalification and registration protocols for the prospective estate agents,
keep a register of all qualified and certified estate agents, enforce
compliance to a code of ethics and practice through sanctions, institute and
implement mandatory training programmes for practitioners, Institute
appropriate professional indemnity insurance programmes for members, to ensure
the protection of members of the public, set remuneration due to agents whether
as single agents or cooperating agents, generally regulate the practice of estate
agency, develop and project the practice of estate agency as a respectable
brand that will continuously earn the trust of members of the public through
quality service delivery of its members. It will also protect and defend the
interest of practitioners.
1.2 STATEMENT OF THE PROBLEM
Real estate agency
practice in Nigeria like other countries of the world contributes massively to
housing delivery system as it helps to meet as well as cater for the
housing/accommodation needs of people. Due to the important roles real
estate agents play in the housing and accommodation delivery sector of the
economy, so many people have become victims of accommodation fraud from the
hands of some of these estate agents who go about duping genuine accommodation
seekers which has been the reason for calls from many quarters on the need to
professionalize the profession in Nigeria. Professionalizing
real estate agency in Nigeria will benefit not just the consuming public but
also the practitioners. While the public will benefit through improved or
quality agency services from reliable and well referenced real estate agents,
the practitioners will benefit through proper regulation of the practice, which
will ensure that only qualified and certified persons practice the trade and
that the practitioners are appropriately trained, equipped and remunerated.
1.3 OBJECTIVES OF THE STUDY
The
following are the objectives of this study:
1. To
examine the issues involved in the professionalizing of real estate agency
practice in Nigeria.
2. To
determine the way forward for the professionalizing of real estate agency practice
in Nigeria.
3. To
analyze the factors hindering the professionalization of real estate agency
practice in Nigeria.
1.4 RESEARCH QUESTIONS
1. What
are the issues involved in the professionalizing of real estate agency practice
in Nigeria?
2. What
is the way forward for the professionalizing of real estate agency practice in
Nigeria?
3. What
are the factors hindering the professionalization of real estate agency
practice in Nigeria?
1.6 SIGNIFICANCE
OF THE STUDY
The
following are the significance of this study:
1. The
outcome of this study will be of benefit to the government and its agencies in
that the practitioners of the trade will be brought under one umbrella, which
will make easier the regulatory work of such government agencies like the EFCC
in its fight against money laundering.
2. The
result will educate the general public on the need to patronize the
professional real estate agents and what criteria makes someone a real estate
agent e.g. qualifications and the professional body the real estate agent
belongs to.
3. This
research will also serve as a resource base to other scholars and researchers
interested in carrying out further research in this field subsequently, if
applied will go to an extent to provide new explanation to the topic.
1.7 SCOPE/LIMITATIONS OF THE STUDY
This
study on professionalizing real estate agency in Nigeria; issues and way
forward will cover the activities of real estate agency practitioners in
Nigeria considering professional ethics and code of conduct.
LIMITATION OF STUDY
Financial constraint– Insufficient fund tends to impede the
efficiency of the researcher in sourcing for the relevant materials, literature
or information and in the process of data collection (internet, questionnaire
and interview).
Time constraint– The researcher will
simultaneously engage in this study with other academic work. This consequently
will cut down on the time devoted for the research work.
1.8 DEFINITION OF TERMS
Profession:
a paid occupation, especially one that involves prolonged training and a formal
qualification.
Ethics:
moral principles that govern a person’s behaviour or the conducting of an
activity.
REFERENCES
David P. Hunter (1997).
Professional Ethics and the Real Estate Agent. Illinois Real Estate
Letter Fall
Fong-Yao Cheng (2008)
Client Influence on Valuation: Does It Matter? A Comparative Analysis between
Taiwan and Singapore. The 14th Annual Conference of the Pacific Rim Real Estate
Society, Kuala Lumper, Malaysia.
Gambo, M. J. and Ashen, M. J. (2012).
Application of Economic Indicators in Predicting Construction Cost Escalation
for Residential Buildings in Nigeria. International Journal of Economic Development
Research and Investment, 3 (1), 27-32.
Hemuka N. (2002).
Ethical Behaviour and the Practice of Real Estate Surveying and Valuation in Nigeria.
Kuye Olusegun (1998). Ethical
Behavior and the Practice of Estate Surveying and Valuation in Nigeria. John
Wood Ekpenyong Annual Lecture Series.
Makanjuola Ojewumi (2005).
How to Make Huge Profits in Estate Agency: 21 Lessons that Sharpen and Shape
You. Knight Service Books, the Pent House Suit, Greenfield Plaza, Ibadan,
Nigeria
Oluwole Alfred Olatunji (2008).
Assessing Client’s Confidence and Satisfaction in Construction Professionals in
Nigeria. Journal of Environmental Science, FUTA.