The public perception of estate agents is not always positive. As a matter of fact survey after survey undertaken on this topic overseas shows the same lack of trust and questionable ethics and comparisons to car sales people abound.
The estate agent is the archetypal entrepreneur. They put it all on the line 7 days a week 24 hours a day and operate on a total risk/reward basis. No sale/no commission! This is not a profession for someone who is wishy-washy in their approach to life and to business. In this business, it’s performing or starving! There are no soft options – or are there?
When Neville Berkowitz, a property economist, institutional adviser, and developer, with over 44 years’ experience in property decided to reinvent the estate agency business with the formation of HomeBid, S.A.’s largest low commission estate agency, in 2015, he threw the rule book out the window. He decided to pay estate agents a monthly salary, a bonus payment structure for achieving realistic targets, three weeks paid leave a year, with allowance for two weeks paid sick leave annually.
There are some 200,000 homes sold a year in the price range R300,000 – R50m and some 35,000 registered estate agents. This means that the average agent sells 5.7 homes a year at an average commission of R60 000 of which their principal takes 50%.
The average estate agent then earns R15,000 a month. Out of that amount they have to pay for their own car, petrol, cell phone calls, motor vehicle insurance and motor running expenses. In addition, they have to pay for their living expenses and essentials such as medical aid, pension contributions and school fees to name just a few of the typical expenses of a working adult.
HomeBid pays their agents a monthly salary of R20,000 to R30,000 per month plus bonuses of up to a further R10, 000 per month if they exceed their monthly sales targets. The agents are office bound, don’t do any canvassing, no petrol or cell phone costs, no show days and usually work an 8AM to 5PM workday five days a week. Parents usually leave at 3PM to fetch kids from school and then work from their home thereafter. HomeBid agents are expected to answer telephone calls after hours and at weekends to service their clients’ needs as buyers and sellers.
According to Statistics SA, the average gross monthly remuneration in South Africa in January 2017 was R18,502. So the average estate agent working totally on a risk/reward commission only basis earns less than the average South African employed in the formal sector of the economy.
“I believe it’s time we brought the estate agency profession into the 21st Century and paid estate agents a monthly salary with benefits of bonuses, paid annual leave and paid sick leave. It’s the only decent human thing to do and at the same time train them correctly and allow them to reach for the sky. This will help repair and improve the public perception of estate agents. The testimonials on our website from satisfied sellers and buyers praising our staff is our proudest achievement”, says Berkowitz.
This feature was sponsored by HomeBid – the largest low commission estate agency in South Africa, currently selling over 50 homes a month, at a minimum commission of R17,500 plus Vat.
Find out more about career prospects at HomeBid here.