To keep myself occupied this Sunday evening, I will be dedicating this thread to my friends in the real estate agency business, or property agents. I will be explaining a lot of things about the business. Stay tuned. Happy Sunday.

I am going to talk about a different aspect of the housing industry today. I had told some people that I am a complete all rounder in the building and housing delivery sector, why? Because I have participated in almost every aspect of the building and housing delivery supply chain. I am dedicating this thread to the house and land agents, hereinafter referred to as the “agent”
The agent is a person who makes a business of finding houses for rent and connecting prospective tenants to the landlords who have built houses for rent. The agent is also somebody who searches for land for sale from land owners and connects them with prospective buyers who want land for different uses. There are so many uses for lands as you all know. Some buy lands to build houses, some to build companies and shopping plazas while some other buy land for speculative purposes. Let us not also forget those that buy land for the bragging rights. “I am a landlord in lagos na” land is a very good store of value as it has proven to retain a lot of its value over the years in comparison to other investment vehicles.

The housing sector in Nigeria is largely unregulated, neither the government nor the private investors in building process can give any data that is anything near accurate as to the number or class of buildings available or being built in any part of the country. The business is an all comers affair, with various people; both trained and untrained trying to earn a living through participation in the building and housing delivery services. The easiest way to get into the business is from the down floor, through the provision of services like finding and offering lands and houses to prospective tenants and investors alike.

As a former agent myself, I feel I am more qualified than most people to explain the ‘behind the scenes’ processes and correct some misconceptions about the housing and land agent service delivery business. I hope that by the time I finish this write up, many people will come to appreciate, if not embrace the practices of those who suffer to give us lands and houses.

Let us start from the beginning; shelter is one of the basic human wants according to Abraham Maslow. The need must be filled before man could be called a man. Agents are filling the gap between the tenant and the landlord, and I feel their service is very important to society. We all know how cumbersome, if not outright laughable it will be for an individual to go searching for land or houses all by himself. This will entail that the prospective tenant, who in some cases are strangers to the areas they want to occupy, will go knocking on strange doors, asking for houses available for rent. This is a time wasting and expensive option, often fraught with risk which most people are not ready to take. What if you walk into dangerous compounds all in the name of looking for houses?

This is where the estate agent comes in; he scouts the area, looking for available vacancies and tries to link the tenant with the landlord in the business of earning a commission on the transaction. Their service sometimes includes other ancillary services like provision of transportation and packing labour to help the new tenant settle into the area with minimal difficulties. The agent is your friend any day and any time, just work with them to get the best of your money.

So, why not patronize the lawyers and keep the agents away from the estate deals, some prospective tenants will ask. Well, in every sector, there are classes of services. In the beginning, it used to be only the agents handling estate deals, due to some crooked agents and the need to inject some level of professionalism in the housing industry, there where calls for professionals like lawyers and real estate companies to take over from the agents and provide estate services in a professional manner devoid of the disorganized atmosphere of the sometimes uneducated agents. Lawyers and estate companies are good, but we have found out that these professional bodies are not ready to do the ‘leg work’ of walking from place to place to seek for vacancies or taking tenants to a location repeatedly. Which lawyer will abandon his legal services to sweat it out on the hot streets to show different tenants the vacant property/land all day long? Which real estate company with their young hot graduates will afford to provide logistics of land inspections without ‘contracting’ same leg work to the same estate agents which we thought we are going to eliminate in the first place?
What happens these days is a situation where you get hit by a double ‘whammy’ you end up paying the agent, and paying the lawyer in the same rental transaction, who loses? You will hear charges like;
Landlords rent: N1,000,000
Lawyer’s fee: N 100,000
Agent fee: N60, 000
In the good old days you would have just paid your rent and paid the 60k to the agent and that is all.

So many people regard estate agents as bad people, and I will not spend time blaming them because in some instances, some agents have been found to be culpable of sharp practices, even crimes in many cases. I am going to elaborate on this aspect so we can understand the field better. Please note that I am not holding brief for the agents, I am only saying it as it is.

EXPLAINING THE CHAIN BUSINESS WAHALA.

Some real estate deals have been won and lost because of the chain. What is then a chain? A chain is a situation where more than one agent is advertising for the same property. It starts when one agent gets information of a land or building for sale and starts to advertise same property. Because he cannot reach all the prospective tenants who might need the property, the first agent informs a second agent and intends to share the commission with the second agent in the event that the second agent gets a willing tenant/buyer for the property in question.
The chain will continue when the second agent transfers the same information to a third agent and the chain will be getting longer, some properties will have like 10 agents on the chain, and that’s where the problem starts, you may like the property after agent number 10 shows it to you.

The 10th agent will have to go back and contact the agent number 9 who showed him the house or land, number 9 will contact number 8 and so on till you find number 1 who then meets the landlord for the keys or documents to the land as the case may be. Note that in a chain situation, the rental commission will have to be shared between the agents that participated in the transaction.

Do agents cause the rise of rents, or inflate the cost of lands? Find out tomorrow as we continue this write up.

Good write up, As an Estate agent my self practicing in South Africa, I believe there are lot of things missing in the real estate business in Nigeria. Firstly, the real estate body has to be strong. All practicing agent has to have a license which a prospective buyer or tenant can request for and confirm from the body, which they can trust and do business with such agent. In South Africa, you can easily search an agent on the board website to confirm there status if registered or not. Also, I do not think a lawyer should earn more than an estate agent in the property Field, it shouldn't be allowed, a laywer has there own field and if property law in Nigeria is strong, an agent should be able to handle property transaction's without a lawyer. An attorney should only be required during sales of properties which they require to confirm all documentation's and confirm ownership and transfer of ownership, a lawyer shouldn't be involved in a rental aspect atall. Also, is there anything called Mandate in Nigeria? Example is a sole mandate where no other agent can go near or sell a property which a particular company has listed into the market? If so, there shouldn't be an issue with sharing commission , because it will be in writting even if you willing to involve another agent. In all, Nigeria Real Estate Body needs to be very strong and verify most of the agents to make buyers and seller comfortable. Thank you.