Are you a scholar or graduate who is considering a career as a real estate agent in South Africa? In an interview with Anna Gehlhaar, Annique investigates the low-down on entering the real estate industry after Matric or a tertiary qualification.
Meeting Anna
Through the gushes and cold chills of a winter’s morning I trot up the driveway to meet with Anna Gehlhaar, a charming and successful Remax estate agent based in Cape Town. Over a cup of coffee, Anna and I sit down to talk about her career as an agent, and what advice she might have for someone who is looking to start on this career path. Anna has been an estate agent for over a decade and has worked for three different agencies. Currently she is working for Remax Living.
I start by asking her about the beginnings of her career and what made her decide to become an estate agent.
“I always loved homes,” she says. “When I lived on Mallorca in the 90s, I renovated many homes and sold them on.” She adds with a grin, “And then I thought, it was so rewarding when I saw how people loved their new homes, I could do it as a profession.”
In 2003 Anna did the board exam in South Africa, which used to be the way to go about becoming a qualified estate agent. She explains that since then things have changed, and that the standard for agents in real estate has been raised – it has since become a more recognized career.
She notes, “After all, you’re playing with big money,” and that you need to take care of your clients’ best interest, including their best financial interest.
Steps to becoming an Estate Agent – for matrics and graduates
Do I First Need a Degree?
“Nowadays it’s not as easy to become an agent anymore,” Anna notes. “Before, all you needed was to do the board exam and start looking for stock and properties to sell.” As Anna indicates, today’s process of becoming an agent is slightly more extensive than before, and requires more time and effort. You don’t necessarily need a degree to become an agent. Indeed, you can finish Matric and head straight for your internship. If you are a matriculant, there is a specific way to go about entering the industry.
Nicole Mullins from the South African Real Estate Academy (SAREA) breaks it down in the following steps:
- First, you need to complete a 12-month internship with a registered estate agency
- Get your FETC Real Estate NQF Level 4 qualification via intern training
- Write and pass the PDE (Professional Designate Exam) at Level 4
- Complete and submit the Intern Logbook as required by the EAAB
- After steps 1 – 4 are complete, apply to the EAAB to upgrade your status to full status agent
Even though you don’t require a degree by necessity, it can be beneficial to complete one prior to beginning your career path in real estate. Some qualifications like a BCom, LLB, or MBA (along many other qualifications) may allow you to obtain a full or part equivalency exemption from the EAAB.
This means that your degree or qualification might enable you to skip the above-mentioned steps (but you will still need to complete other processes).
Having a tertiary qualification prior to starting out in real estate can also benefit you in various ways, like knowing how to manage your accounts, how to market yourself, or how to deal with clients. Anna tells me that many agents have a background in Law, which comes in very handy in certain legal situations.
Now I’m a Qualified Agent – Are There More Exams or Processes?
Yup. All practicing agents need to collect a certain point score each year. This is called the CPD (Continuous Professional Development).
Anna elaborates, “As an agent, you need to accumulate 20 CPD points per annum. This means we have to attend workshops and training to further our education and personal, as well as professional development.” 15 of the points are verifiable, and have to be achieved through the EAAB. The remaining 5 points are non-verifiable, and can be achieved through any institution or workshops as long as the agent can prove his or her achievement. In general, one hour of workshop attendance or study equates to 1 CPD point.
Fees, rates, income…and all that jazz
I go on to ask Anna about money matters – since those are important aspects to consider when choosing your career. You need to have an idea of what awaits you financially, right?
Earning on Commission
A very important aspect about the real estate career is that agents earn commission only. That means, if you don’t sell, or don’t manage rentals – you have no income.
Anna remarks, “We earn commission, so you need a lot of drive. If you only earn on commission, your income is never guaranteed. Although you can earn a lot, it really depends on the person you are – if you are more security-driven, then maybe you need something else as a back up.”
I ask Anna how she generally calculates her commission, as I know that the rates and fees vary from agency to agency.
She tells me, “The going rate is anything between 5.5% and 6.5% of the sale, plus 14% VAT. It’s always negotiable. And from a selling price of about R 15 000 000 plus, you need to be a bit more flexible.”
I then ask her about rentals, as that works slightly differently. She says that in general agents have a finder’s fee for finding a tenant, and if the agent goes on to manage the rental, then the management fee is around 12% – 15% of the monthly lease, depending on the maintenance.”
As I’m sure you have calculated by now, if you sell a house for R 1 000 000, you can theoretically walk away with no less than R 55 000, plus 14% VAT! Well – almost. A part of the earned commission goes to the agency. Commonly, an agent pays around 50% of his or her earned commission to their agency. In turn, the agency covers the agent’s desk fees (paper clips, printing, boards, etc.). At Remax specifically, an agent pays only 6.5% of his or her earned commission to Remax, but therefore has to pay his or her own desk fees – this amounts to an average of R 6500 per month, including advertising.
So, yes, you never know how much you will earn. You can end up in a long drought, but also seal multiple deals in the same week. On average, an agent at Remax earns about R 500 000 per year… not bad. The only thing is, of course, it comes in as bits and pieces, and not as a regular paycheck at the end of each month.
Anna’s advice for you
The real estate industry has good and bad sides, as all careers do. For Anna, the best part of her job is matching the right property to the person. The worst is the occasional sacrifices you need to make, like missing events or not being able to meet with friends or family because you are having a show-day (a show-day is where a seller opens his or her home for potential buyers to come have a look, and this usually falls on a Sunday). She adds, “But then again, those things are important. Show-houses are where you generate business.”
She ends our interview with the following piece of advice: “In this job, you need to have passion to sustain yourself, to keep going. And you’ve got to be dedicated. This is a 7-day job and you work 24/7. I once sealed a deal on the last day of the year while I was on holiday,” she says with an encouraging shrug. In other words, even when you do take time off, try to be reachable and regularly check your emails – sometimes that’s when things come together.
She adds, “And if there is one thing I can advise anyone starting out, it’s this: find a great mentor. It is very helpful to have someone who can show you how things work.”
EduConnect 2cents
An agent’s reputation and work ethic is probably his or her most essential business generator. NETWORK! That’s what it’s about. Countless of clients end up being referrals from previous buyers or sellers. So if you make a name for yourself and have good relationships with your clients, many of your deals might be thanks to a good word of mouth.
FYI:
Requirements for a career in Real Estate:
- Recommended High School Subjects: Subjects within Business, Commerce & Management Studies, and within Services
- Other requirements: 12-month internship, FETC Real Estate NQF Level 4, PDE exam, Intern Logbook (or an exemplifying qualification or degree)
