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Specialisation - the future of the real estate industry?
Category Property News
The advent of the digital age along with significant shifts in consumer preferences have dramatically transformed the real estate industry in recent years, not least the traditional role of estate agents which has become far more exacting, prompting specialisation in larger markets.
Steve Thomas, Secure Estate Specialist for Lew Geffen Sotheby's International Realty in Constantiaberg, says: "Like most industries, the real estate sector is increasingly facing the challenges of disruption, with rapid evolution and increased competition driving changes across the board.
"Additionally, lifestyle priorities have changed dramatically over the last 15 years, some of which have emerged through personal choices, whilst others have been thrust upon us by economic and social trends.
"Two significant shifts are a move toward a higher densification of residential property due to urbanisation and the growing demand for lower maintenance, lock-up-and-go homes with the latter being spurred by rising costs, security, commuting lifestyles and affordability.
"This has also resulted in rampant development and many more off-plan purchasing options. Add to that the slew of new laws and statutes applicable to the industry and the need for specialisation becomes apparent."
Partner Secure Estate Specialist, David Burger, says: "These days, an estate agent has to be able to multi-task many disciplines in the course of concluding a sale, and certain types of property transactions can be more complicated than others.
"Typically, Sectional Title and Gated Estate properties can have more potential hurdles and pitfalls than traditional freehold homes, as can transactions higher up the value chain where trusts, PTY (Ltd) and share transactions, often in off-shore structures, can be in place."
He adds that sales of estate homes are usually more complex as there are always additional factors to consider, including security, levies, shared services, potential for future shared costs, design guidelines, constitutional regulations, committees and dispute resolution.
"What if a R30 million property in a prestigious gated estate was sold to a foreigner but no reference was made to the future exit levy, or if a buyer/new owner can't build his garage extension and then wants to sell and realises the exit levy is R250,000?
"A multitude of unique points have to be adequately addressed in the legally binding sale agreement drawn up by the agent. It can confidently be said that this is no place for a novice."
Fellow Specialist, Brenda Pretorius, says that in the coming years, real estate professionals will have to understand and get to grips with a host of new factors such as the underlying economics of cities and how to incorporate technology and sustainability into asset valuations.
"Not only will at least a degree of specialisation be necessary to optimally perform our jobs, but consumers will expect it.
"Recently published results of a seven-year study of 197 000 people by Innermetrix Incorporated, a research-based firm specialising in personality traits in business, concluded that performance and success had more to do with the degree of specialisation than any other single variable considered.
"Their base question was 'Are there things that all top performers share in common that nonperformers don't?' and the overwhelming finding was that specialisation allows service providers to offer their target markets a superior value proposition over those that generalise."
Pretorius adds: "Between the three of us, we have almost four decades of experience in the industry, most of it garnered in our current region and surrounds, and a significant amount of that time has been dedicated to new developments and estate properties.
"We believe that there is absolutely no substitute for solid practical experience in a sector and geographical area."
However, external influences aren't the only factors that are evolving and driving change; the industry itself is spurring increased professionalism and, in turn, specialisation.
"Fifteen years ago, anyone could decide to 'become an estate agent', says Thomas, "and all that was required was a fixed one-year period as a 'candidate' after which they were eligible to sit a virtually un-failable exam to become a full-status agent.
"These days, the law calls for everyone entering the profession to register with a reputable firm as an intern during which time they must conduct a recordable series of tasks and maintain a cross-referenced logbook which must be submitted to the Estate Agency Affairs Board (EAAB).
"A portfolio of evidence must also be submitted to a 'Services SETA' establishment for audit and multiple levels of assessment before a level of competence and NQF4 qualification is bestowed upon the applicant. Only then may the professional designation exam be written and, if passed, the applicant can register for a full status FFC with the EAAB and begin to practice."
Thomas concludes: "As the industry evolves, we are seeing the requirements of professional services diminishing in certain sectors, whilst in others they're growing, with operational management and expertise becoming increasingly essential. Undeniably, there is an increasing need for more diverse skills and specialised expertise in the real estate industry.
Author: Lew Geffen Sotheby's International Realty