Proliferation Of Unregistered Estate Agent In Real Estate Market
This research project is meant to identify the impact proliferation of unregistered estate in abuja Municipality. The occupation of real estate broker or real estate agent began in the early nineteenth century. Prior to the mid-nineteenth century, most sales of real property involved lawyers and business persons but not real estate agents as we have come to know them. In some instances, parties to real estate sales had employees who handled the transactions, but those employees were not considered real estate agents or brokers. In light of this the objectives of the study was to assess the growth as well as identify services the Estate Agents offer to the public. Furthermore, limitations which restrain Estate Agents were identified as well as ascertain if their services has benefited the public. The study was also centered on factors affecting Estate Agents as well as real estate market thus giving a clear picture on their interdependence in regard to access to the Real Estate Market. The sample was selected using random technique. The study used primary data collection method via a questionnaire to collect data on impact of Property Development in unregistered Estate Agent Growth. The researcher approached the respondents and requested them to participate in the survey. The data that was collected was recorded in tables to analyze the data; average scores for the responses per item will be calculated .After completion of the research, research the findings were published and copies distributed to the university library.
1.1 Background of the Study
The term real estate is commonly used interchangeably with real property to refer to land and all things permanently attached to it. Property in itself consists of valuable rights held to the exclusion of others (Betty and Ely,2008). The definition of real estate typically includes land, fixtures (attachment) to land, anything incidental or appurtenant to land that benefits the land owner and anything which is immovable by law. Real estate is a readable commodity with a specialized market due to its unique characteristics of geographical immobility, heterogeneity, fixity, indivisibility and indestructibility. In addition, investment in real estate requires a large capital outlay and is surrounded both by many legal factors and government regulations (Ventollo and Martha, 2001).
The decision to invest in real estate is fast becoming the preferred choice for most Nigerian investors who consider it one of the most stable forms of investment. In addition, the rapid increase in the price of Nigerian real estate has made many investors venture into real estate as a source of income. In recent years, the Nigeria real real estate market has seen a new breed of investors who are targeting capital growth/ appreciation as the most important source of return for real estate investment through their sale.
Nigeria in recent years has been flooded with developers bringing property into market for sale, rather than for the purpose of obtaining a stream of income in the form of rent. Ventollo (2001) simply defines a market as a place where buying and selling takes place. Due to the unique characteristics of related estate, the market for real estate all over the world does not conform to the definition of an efficient market. An efficient goods market is one where the products have close substitutes, many buyers and sellers who have perfect knowledge of prices and goods exist there is little government interference and the product is easily transferable. Real estate requires professionals who possess an understanding of the processes to mediate between the concerned parties who include but are not limited to financiers, developers, sellers and purchasers. The rapid increase in the prices of rel estate has made many investors and unregistered agents ve tire into real estate as a source of income.
1.2 Statement of the Problem
The practice of estate agency is not a new concept in Nigeria. However, it has for a long time been associated purely with the commercial transaction of letting properties for landlords, buying and selling land, factories, houses, commercial premises, businesses as going concerns hotels and the ownership rights associated with them. The agents acts on behalf of the seller or on behalf of the buyer for a commission. In this regard, in addition to the firms registered to carry out this practice, there have also been a large number of estate agents practicing without any background knowledge and/or understanding of real property as a commodity and the real estate market as a special one. Hence there is need to assess the proliferation of unregistered estate agent in real estate market.
1.3 Objectives of the Study
The major objective of the study is proliferation of unregistered agents in real estate market.
1.4 Research Questions
- What is real estate?
- What is real estate market?
- Who are real estate agent?
- What is the rate of proliferation of unregistered agents estate market?
1.5 Significance of the Study
The study gives a clear insight into the proliferation of unregistered agents in real estate market. The need for this study arise 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, is plaques by inefficiency and lack of transparency due to unregistered agents. The study also emphasizes on the need. to enforce a law that will govern the real estate agent.
1.6 Scope of the Study
The research focuses on the proliferation of unregistered agents in real estate market.
5.0 Summary, Findings and Recommendations
The purpose of this study was to determine the effect of property development on the growth of estate agents. This chapter discusses the summary of the main findings, conclusion and recommendations for further research.
5.1 Summary of Findings
5.1.1 Demographic Profiles and General Information
The study observed that the male gender dominated the bulk of respondents of which only two were female. Similarly most of the respondents were below the age of fourty three as compared to only six who were above fourty four years old.
On education matters a total of seventeen respondents had attended college prior to starting their agency business.
However only six and seven respondents had attained university degree and secondary certificate respectively meaning that all respondents had attained at least a secondary education.
5.1.2 Internal Agency Information
Findings show that out of the services offered by agents, a total of twenty one respondents offered a combination of selling, buying and leasing of property, whereas five agents offered selling and rental services exclusively. Only a minimal number of two respondents engaged in leasing services only.
Furthermore the study also revealed from the cross tabulation in Table 6.0 the researcher found out that majority of the respondents used a startup capital of less than twenty thousand shillings and only six agents used an initial capital of between 20,001-50,000 shillings.
However in both scenarios most of the agents, totaling twenty five used their savings as startup capital as compared to only five respondents using profits from other businesses to finance the agency business.
5.1.3 Growth Analysis
The study observed that out of the thirty respondents, twenty four indicated a growth since 2007 as compared to only two in the negative. The four who did not respond said they started their business after 2007. Furthermore the study also indicated that growth was largely influenced by property development other than rise in rent charges.
Findings also show that employees have slightly increased but majority of the agency business has maintained a 0-5 range. In addition the study also observed that majority of the property owners increase rent charges for residential buildings annually as compared to commercial property, after two years or more.
The study also revealed that on the first year of business most agents managed less than thirty properties, however the numbers shot up drastically and now most agents on average manage more than thirty one properties. The study also indicated that majority of agents in their first year managed less than thirty tenants. This number increased significantly and currently majority of agents manage over thirty one tenants of which nine of the respondents manage over ninety one tenants.
5.2 Conclusion of the Research Study
Real Estate market is the new frontier in investment even now actively competing with the Nairobi Stock Exchange. Nigeria has positioned its self as the gateway to East and Central
Africa thus many companies find themselves in Nigeria each wanting a piece of the Action.
This has also triggered a rush of land to build real estate thus driving prices for both up much to the advantage of property developers and estate agents who eventually get a piece of the pie.
Abuja has its own unique niche in the Nigerian market. Currently, according to the recent Central Bank of Nigeria (CBK) Bank Supervision Survey for 2011, Abuja County had the third largest branch network of banks with 52 bank branches, after Nairobi‟s 465 and Mombasa‟s 98 branches. Furthermore, banks are competing for commercial space with learning institutions setting up mini-campuses in the town, while major retail chains have returned to the town with Uchumi, Nakumatt, Tuskys and Naivas having opened outlets within the last two years.
In addition Abuja is Nigeria‟s third largest residential town after Nairobi and Mombasa and was rated the fastest developing town in sub-Saharan Africa in 2011 by the UN habitat. Prices for commercial space have more than doubled in the last four years with office space costing up.
All these are indicators that estate agents are needed more and more so as to benefit from the enormous exchange in cash by providing services relating to sell, buying, leasing and even advising on real estate investment areas as they have wide information from their work in the field.
The data in chapter five also indicates that over the last five years the agents have drastically increased their net worth which is majorly attributed to more property they manage which is increasing by the year as well as increase in the number of tenants. Furthermore property owners‟ increase rent for residential houses annually and commercial property after two or more years. This coupled with the ever appreciating value of land has meant that estate agents are laughing all the way to the bank.
The County Government of Abuja should digitize their records of all registered Real Estate Agents as well as other businesses and make them accessible to the public through their website. The county government should further team up with property developers and selected marketing companies so as to promote Abuja County as the ultimate investors‟ choice in regard to property development.
The County government should also create a taskforce to root out rouge estate agents who are mushrooming in the county taking advantage of investors or potential tenants who are new in the area and not delivering services after payment.
Commission due to estate agents should be revised so that the agents can reap mmore from services rendered to tenants on behalf of property owners. This means that the agents will be motivated to provide efficient and effective services, expand their business as well as adding employee salary to commensurate with tough economic conditions as well as increase in
5.4 Suggestions for Further Research
Further research should be conducted in the booming real estate industry of Nigeria by both research professionals as well as academicians. This will help ease information on the same to stakeholder especially if the research is tailor made to focus on improving fast growing towns and the newly formed county government in Nigeria who are out to woo investors.
More research should also be conducted specifically on the real estate agents in Nigeria as well as on their documentation so as to root out quacks who are taking advantage of naive investors to make quick cash in the ever growing property market.
Universities and colleges should also introduce courses from diploma to masters‟ level on the different fields in Real Estate market . This will increase public knowledge on the benefits of estate development as well as introduce new norms which will facilitate effective and efficient property development.
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