Fin24.com recently ran a story on its website that South Africa’s property industry has already lost 55 000 registered estate agents out of 90 000 as a result of the weaker housing market.
As interesting as the story were the comments left on the web page by readers:
About time, with their exorbitant commission at 7% per sale it about time some of these crooks went t1ts up!
Good riddance. Should have happened ages ago. They are the bloody same as insurance agents and IT specialists, a dime a dozen. Always on your case if you are interested in property, knows what you want without asking, and tries to sell you the property that they will make the most commission on. Thanks for leaving and making my choices mine for a change!
Great news!!! This means 55 000 less estate agents to phone you at 1800 at night to try and convince you to sell your house with which you were perfectly happy. Oh yes I forgot, you then have to buy a more expensive house and the agent walk home with two deals. We will also be less exposed to name dropping, an must have quality for estate agents.
This may not be representative, but I get the impression from these comments that there is some discontent about the residential property broking system.
They endured an unprecedented boom and those who couldn’t consolidate their operations in a boom deserve no-ones pity.
It’s business right?
Every second bored housewife registers as an estate agent – they drop out every recession.
Only about 5% of agents make any real money – and they make fortunes.
One can only hope Gert, Louis and Stan don’t get a similar cold analysis if they are unfortunate to fall victim of the recession.
Bankers and Estate Agents will forever be villains
Hmmm… fair comment? A few years ago I tried my hand at this game, more to find out how the industry works than for any real intentions of following a career.
Came to to conclusion that most people in this game are second only to lawyers and slightly below used-car salesmen. I think it takes a certain type, and I sure ain’t the type! Spending a few hundred bucks and a week studying to get certified sure prepared me for doing the deals though, was way more than worth it in the way of preparing me for property deals – its nice to talk to them in their own language, the BS-factor drops considerably.
However, a few hundred bucks and a week’s studying to become a certified estate agent? No wonder there are gazillions of “us” out there, the industry should be a lot more discriminatory.
I hope the car manufacturers get the same deal.
I heard that the car manufacturers were marking up their cars by 120%, unfortunately I have no proof, however I hope they get screwed.
Has anyone ever thought about the inflationary aspect of estate agents ? Have a look at the ratio between average salaries and aaverage property prices now and 20 years ago. Widened considerably.
How much more effort, and how much more value is generated by selling a property for R1Million plus a bit, rather than R1Million. 7% of the excess for doing nothing extra – no wonder that property and land prices have rocketed.
I have no problem with them, but remove the percentage comission aspect. Pay them a fixed fee for selling a property.
Totally agree with Jody on the car salesmen. In the UK they were offering “Buy-one-get-one-FREE” so if they weren’t making at least 100% then they would be losing! So down with show houses, they are trying to get a list of clients, not to sell your house!
Jody,
Car manufacturers don’t make that much. Typical profits per car (2007 figures Auto News)
BMW makes about $3200 per car
Audi about $1500
Chrysler, Volkswagen & GM between $900 & $400 per car.
But Porsche $28,000 per car — luxury car makers are very profitable.
Fiat/Ferrari — Fiat makes a loss per car, while Ferrari didn’t publish.
For every one job at a car manufactuer there are 10 jobs at Tier 1 suppliers, 100 jobs at Tier 2 and 1000 jobs Tier 3.
Raw materials (mining) would be tier 5 or 6.
Most car manufactuers are currently making losses and shedding jobs — with the job losses cascading down their supplier chain.
do you still want them to get screwed?
7% commission is institutional day-light robbery !
This is a sure case where new finacial regulations of control are required to protect the public .
Mr Zuma , please take note that we are suffering at the hands of greedy people in the propery market.
I’m not sure what your point is Reg; from the range of responses to the responses there seems to be an assumption amongst those only know about the agent mwhen they want to buy or sell that they do nothing, for a huge amount of obsene money.
Truly there are random occasions when selling property is like being in the sardine run…however there are dry seasons to and they predominate and not every house sell in minutes… some can take years.
Perhaps those worthies would preferto pay up front to put their houses on the market. Ads in saturday star, maybe the suburban press; maybe three months of ads; maybe the costs of mounting showdays; securing the house against bandits on showdays, and when taking alleged visitors, or prevaricating pseudo buyers to inspect houses by appointment.
They could in addition pay the expenses of the agent on a per kilometre basis, cover the costs of signage and knowledge aquisition: to actually close deals, a skill known to few… and for sellers or buyers, depending on how you ran the show, it would cost most 10% and rising before the place was even sold. I’m sure a lot of agents would be happy with a large fixed fee after you have covered all those costs.
People love the sales people who sell luxuries that they can choose to buy. They hate estate agents and car salesmen who sell things that they have to buy.
“All buyers are liars
All sellers are thieves”
(Estate agents ditty)
Estate agents earn far more than the architects and engineers who design the properties they sell. They require next to no training but expect obscene commissions. I feel stones for them.
Let’s not be too hasty – a good estate agent is worth their weight in gold. One who is genuinely interested in doing their job properly. Unfortunately, there are a lot of “wanna-be’s” out there who climbed onto the band wagon during the property boom, and who weren’t qualified to give professional assistance. Thank goodness for the EAAB, and the new qualification system!
Luckily, there’s always a choice. You can choose to buy or sell privately in a secure environment, with all the support you need at your fingertips.
THEY WILL BE BACK!!!
Congratulations on your first article that :
(1) Make sense
(2) Is relevant
(3) Not attacking other journalist
Agter os kom ook in die kraal
Excellent analysis Bra Reg.
How many words are yours in the article ?
You could have just provided a link to the Fin24 article if you had nothing to say.
When reading articles of this nature about certain professions I become suspicious of the motives in some of the replies. They smack of narcissism and a chance for retribution by way of the blog.
Reputable Estate Agents perform a welcome service in the property industry by keeping updated databases and networks that would otherwise, particularly in the current property market slump, slow down the seller/buyer processes at great personal cost to buyers and sellers. Also, in my experience commissions can be negotiated in most instances.
However never lose sight of
Caveat emptor – Let the buyer beware. (He buys at his own risk)
and
Caveat venditor – Let the seller beware
I have all the sympathy in the world for the demise of the estate agents.
Not all of them are guilty of ripping the buyers, but the honest ones had to follow suite to stay in business.
The unscrupulous ones just got greedier and greedier during the property heydays, not knowing r caring about digging their own graves.
The unscrupulous agents were pushing the prices for ever higher by their outrageously high valuations, which the banks unfortunately accepted as the market value and granted bonds to the unsuspected buyers who were let to believe that they were getting a bargain deal.
You can make a private sale if you do not want to use an Estate agent. Consequently you do not have to fall into the clutches of an agent whether unscrupulous or not. Not all agents are unscrupulous. There are agents who provide a genuinely professional and honest service to their clients both as sellers and purchasers of property. Like so many things you just have to find them.
I think “good”, “professional”, “honest” and “reputable” applied to estate agents are oxymorons or whatever like “honest lawyer”, “trustworthy politician” and “military intelligence”.
I’ve bought quite a few investment properties in the past few years and if I look back, the estate agents made the most. When I tried to resell some of the properties when times got tough they were nowhere to be seen. No of their initial appreciation in value of my property came true. Most of them are not qualified to give investment advice.
I’ve bought houses in Holland and in France and in the last year trying to buy property in SA. But nearly all the SA estate agents are the worst that I have come across. Even the ones from the well known big firms.
The best or worst story: Chass Everitt has two pieces of land for sale but the size of the land in the ad is not clear. The one has 89.000 (…? )and the other 6.5000 (….?).Very strange numbers .
Phone the lady who is responsible for selling these properties.
She can’t tell me if it’s square meters or hectares!!!! She thinks the one is m2 and the other ha. I already know because I know the prices in that area. It’s hectares. She will phone me back. It’s three weeks ago and she has’nt phoned yet. She must have a great salary or have other priviliges in these times of a down market if she does’nt even try to sell them to me.