ABSTRACT
This study, assessment of the proliferation of unregistered estate agent
in real estate market is aimed at examining the activities of the increasing
numbers of unregistered estate agents in Nigeria with particular interest in Lagos
metropolis. To achieve this the following specific objectives were pursued: To
examine the concept of real estate agency in Nigeria; To examine the activities
of unregistered estate agent in Nigeria real estate market; To assess the
impact of the proliferation of unregistered estate agent on the real estate
market and to identify the challenges affecting real estate agency in Nigeria
real estate market. The researcher adopt the use of questionnaire, observation
and personal interview to gathered relevant data from the respondents while
tables, simple percentage and descriptive statistics were used for data
presentation and analysis. The study reveals that there have been increases in
the number of unregistered estate agent in the real estate market which is
majorly due to rising number of unemployment and regulated / poor supervision
of the activities of real estate agency in the study area. The researcher
therefore recommend that the capacity of the Estate Agents Registration Board
should be enhanced to enable it better regulate the profession, unregistered
and quack agents currently practicing should be tracked down and made to either
go for training in the diploma or degree of Real Estate, work under a
registered estate agent for a period of not less than one year or face having
their offices closed and prosecution.
CHAPTER ONE
1.0
INTRODUCTION
1.1
Background Of The Study
Real estate agents obviously perform a middleman function in that they
bring buyers and sellers together. They build the bridges between people in
search of landed properties and estate owners. Real estate is a special type of
asset that almost everyone desire to own.
Real estate agency was introduced by the British during the colonial
era, although before then, there were middlemen in land transactions. Estate
agency grew from the old auctioneers who were chattlemen attracted by the
exciting prospects of selling large estates. These auctioneers were mainly the
lawyers who had easy access to the available properties in the market and kept
the lists of estates for sale and prospective purchasers. These real estate
practices became visibly lucrative during England’s Industrial Revolution of
the nineteenth century. During this period, new wealth and employments were
created. The desires for homeownership were largely satisfied. New lands were
explored and built-upon or bought and developed. The market for property
development widened considerably and the property markets grew exponentially.
Then as more lands were developed, more properties enlarged the market base,
and property experts were needed as people began to realize the complications
that arose from marketing or buying properties.
Notwithstanding, more self-styled estate agents also emerged, and over
time, the real estate business became marred by incompetence and unwholesome
behaviors. Due to lack of control over the self-styled estate agents, there
were many victims of obtaining and fraud. To safeguard public interests against
unscrupulous practice of estate agency by unregistered estate agents and rogues
in the 1970s and eagerly 1980s, the Nigeria government and the professional
bodies governing estate practices have enacted the guidelines and laws guiding
the practice of estate agency in Nigeria.
The law establishing the profession of estate surveying and valuation in
Nigeria included the estate agency as part of the functions of estate surveyors
and valuers in Nigeria. Notwithstanding, presently in Nigeria it is all comers
affair and there is an association of estate agents. Entering the real estate
market is easy, and requires neither qualification nor previous experience,
this gives every rank and files opportunities to practice or become estate
agent with the requisite educational qualification and registration with the
right professional bodies.
Real estate market is not dominates with one particular profession,
although there can be no doubt that some of practicing estate agents are
members of the Nigerian Institution of Estate Surveyors and Valuers, there have
been increase in the number of unregistered estate agent with or without
requisite educational background. One needs to comment on the cut-price estate
agent. Many believing that estate agency was a way to make easy money and
believing that existing charges were too high in which perhaps they were
encouraged by the media and such bodies sought to set up business charging in a
variety of ways, but at a level significantly below the charges by the
established agents in the area. Some charged lower rates of commission, others
set fee for a specific service.
1.2 Statement of the Problem
Estate agency should be conducted by men and women with a background of
professional knowledge who acknowledge and follow ethical standards prescribed
by the leading professional bodies of the land (The Nigerian Institution of
Estate Surveyors and Valuers NIESV) and the regulatory board the Estate
Surveyors and Valuers Registration Board of Nigeria (ESVARBON). The fundamental
problem is that the term – Estate Agent is not statutorily defined in the
context of real estate agency practice in Nigeria. The Nigeria real estate
market is overwhelm with increasing number of unregistered estate agent
(quacks) who are victims of circumstances and have to change their careers
informally, they neither have formal training, educational qualifications, nor
professional expertise in the art and science of real estate agency, and have
taken advantage of an apparent lax in the system to encroach into the landed
profession. Due to their numerical strength and lack of awareness on the part
of the people, they are widely consulted and fall victims of several fraudulent
practices and cheats which end up given the profession a bad image in the eyes
of the public.
1.3 Aim and Objectives of the Study
The aim of this project is the assessment of the proliferation of
unregistered estate agent in real estate market.
To achieve this aim, the following specific objectives shall be pursued:
1. To examine the concept of real estate agency in
Nigeria.
2. To examine the activities of unregistered estate
agent in Nigeria real estate market
3. To assess the impact of the proliferation of
unregistered estate agent on the real estate market.
4. To identify the challenges affecting real estate
agency in Nigeria real estate market.
1.4 Research Questions
This study arose from the need to answer the following research
questions:
1. What is the concept of real estate agency?
2. What are the activities of unregistered estate
agent in Nigeria real estate market
3. What are impacts of the proliferation of
unregistered estate agent on the real estate market?
4. What are the challenges affecting real estate
agency in Nigeria real estate market?
1.5 Significance of the Study
The need for this study arose because estate agency as a profession in
this country has seen an influx of numerous unqualified persons because there
exists a conflict between professionalism and commercialism in the practice.
These people come in to provide agency services in the real estate market yet
they have no knowledge of either real estate or the market within which it is
traded. As a result, the real estate market and particularly in Nigeria, is
plagued by inefficiency and a lack of transparency. Transactions involving
great sums of money are carried out in secret which keeps shrouding real estate
in mystery and prevents many people from getting into such investments for fear
of being defrauded.
In addition, the real estate market in Nigeria has seen a sky rocketing
of prices of land and buildings as a result of speculation by investors.
Valuers, who have as their basic role the determination of an estimate in
monetary terms of the value of property, have played a major role in directing
the prices in the Nigeria real estate market resulting in very high values for
property. Although some valuers operate as both valuers and estate agents,
there are those who have specialized in valuation and in most times these do
not work hand in hand with their professional counterparts; the estate agents
who are actively involved in the exchange of property. Without the involvement
of professional estate agents to provide advisory services, property in the
country has become too costly and these prices have ceased to represent the
value of property which in turn has distorted the market and locked out
potential investors.
The study therefore seeks to serve the needs of investors who may want
to venture into the real estate market in Nigeria and particularly in Abuja the
Federal capital Territory. The needs of the professionals in the practice of
estate agency will be addressed therefore contributing to the practice of real
estate agency professionally and if the research findings are implemented,
estate agents will understand better their job descriptions and cope with the
changing needs of a more vibrant real estate market.
Developers/landlords and tenants will also benefit from this study since
it will be brought to their attention why they should only do business with
professional estate agents and therefore protecting them from fraudulent
practices.
1.6 Scope and Limitations of the
Study
This research is undertaken to carry out an indepth assessment of the
proliferation of unregistered estate agent in real estate market in Nigeria.
The study limited to Lagos metropolis, the study seeks to understand how estate
agency in Lagos can be made more professional and make the real estate market
more accessible to investors by reducing the activities of the increasing
number of unregistered estate agency in the study area.
Limitations
The researcher faced various problems when carrying out this field
study. Some of these challenges included:
1. Some respondents were unwilling to fill the
questionnaires since they were suspicious about the study. Many perceived it as
sharing very vital information which they were not ready to furnish the
researcher with.
2. Delays were experienced from the respondents who
took very long to complete filling the questionnaires and constant postponement
of the picking date proved to be very frustrating to the researcher. This could
be attributed to busy schedules and had both cost and time implications on the
researcher since the set timelines had to be changed and many follow-up calls
and visits had to be made which was quite expensive.
3. Landlords were hostile and very suspicious of the
research.
4. At times some of the respondents did not fill in
the questionnaires adequately and ignored certain sections that required the
giving of opinions which made it difficult for the researcher to make adequate
conclusions.
1.7 Operational Definition of Terms
Assessment: According to Cambridge English Dictionary assessment is the act of
judging or deciding the amount, value, quality, or importance of something, or
the judgment or decision that is made
Proliferation: Proliferation according to Oxford English Dictionary is a rapid increase
in the number or amount of something.
Estate: Cambridge
English dictionary define estate as a property or a large area of land in the
country that is owned by a family or an organization and is often used for
growing crops or raising animals: It’s a typical country estate with a
large house for the owner, farm buildings, and estate workers’ houses.
Estate agent: Collins Dictionary define estate agent as someone who works for a
company or clients that rents or sells houses and land for people.
Real estate: According to InvestopediaReal estate is property comprised of land
and the buildings on it, as well as the natural resources of the land,
including uncultivated flora and fauna, farmed crops and livestock, water and
mineral deposits.
Market: According
to business dictionary a market is an actual or nominal place where forces of
demand and supply operate, and where buyers and sellers interact (directly or
through intermediaries) to trade goods, services, or contracts or instruments,
for money or barter.