Becoming a Real Estate Agent

Getting into the real estate business can be one of the most rewarding, enjoyable occupations out there. But it can also turn out to be the worst occupation, with plenty of disappointments, uncertainty and bad experiences waiting for you.

Okay, I have warned you that it might be great to be a real estate agent, but it is just as likely to be the worst experience of your life. But you actually wanted to know HOW to become a real estate agent, not get a sermon about it the virtues and evils of real estate agency, right?

Fidelity Fund Certificate

All you need to become a real estate agent is a valid Fidelity fund certificate. Every year, all real estate agents need to pay a (relatively) small fee to the Estate Agency Affairs Board. In return, the Estate Agency Affairs Board issues those people with a Fidelity Fund Certificate.

You will need to have a valid Fidelity Fund Certificate to legally perform any real estate agency function in South Africa. If a real estate agent does not have a valid Fidelity Fund Certificate, the client does not have to pay the real estate agent for the real estate agency services the real estate agent performed. But a client will also not have a right to claim compensation from the Fidelity Fund if a real estate agent without a valid Fidelity Fund Certificate causes the client any loss or damage.

Qualifying as a real estate agent

In South Africa you don't need any special qualifications to become a real estate agent. You can immediately start working as a candidate real estate agent, under supervision of a full status real estate agent, once you have received your Fidelity Fund Certificate.

Your candidate estate agent Fidelity Fund Certificate application must be accompanied by a cover letter form your principal estate agent, confirming that you are employed by his/her real estate agency.

A real estate agent does have to comply with some requirements, though:

In South Africa, a real estate agent must be older than 18 years of age,
who has never been convicted of an offence involving an element of dishonesty.
A real estate agent must be trustworthy, and must not have been dismissed from a position of trust, at any time, for improper conduct.
Un-rehabilitated insolvents are not allowed to be real estate agents in South Africa.
If the Estate Agency Affairs Board has ever withdrawn a Fidelity Fund Certificate issued to you, in terms of the Estate Agency Affairs Act 112 of 1976, you will also have a hard time to become a real estate agent in South Africa, ever again.

Candidate real estate agents

Real estate agents usually start out as candidate estate agents. Candidate real estate agents have restricted capacity in relation to the completion and execution of property transaction documentation. So, while you are still a candidate real estate agent, any property transaction documentation must be done under supervision of a "full status" real estate agent.

The candidate real estate agent can gain a lot of experience about the ins and outs of the real estate agency business by working under supervision of a good principal estate agent or another experienced real estate agent. Unfortunately, candidate real estate agents also pick up a number of bad habits and misconceptions about the duties of a real estate agent, if the supervising real estate agent has learnt bad things from the real estate agent who trained them.

Becoming a full status real estate agent

It is not hard to become a full status real estate agent in South Africa.

I have a problem with the low requirements placed on real estate agents, who will be responsible for some very expensive assets, with very little training to guide them. But I guess the Estate Agency Affairs Board relies on the transferring attorneys and the principal estate agents (who hopefully have some more knowledge) to ensure a smooth real estate transaction.

But putting my concerns aside, for the moment. There are two ways for a candidate real estate agent to become a full status real estate agent.

The Board Exam

The first (and probably the best) method is to write and pass the Board Exam for real estate agents. This is probably the better option, because the average real estate agent would need many years, working in a very varied market, to obtain all the knowledge needed to pass the Board Exam through practical experience.

The Board Exam will involve studying the handbook prescribed by the Estate Agency Affairs Board. An Introduction to the Fundamental Principles of Estate Agency, by Prof Henk Delport from the University of Port Elizabeth, published and distributed by the Estate Agency Affairs Board is the current prescribed handbook for real estate agents.

An Introduction to the Fundamental Principles of Estate Agency has 215 pages (including illustrations) with basic information about the legal aspects of the wide variety of things the average real estate agent will encounter during the course of his/her duties as a real estate agent. The handbook also contains the standard contracts for real estate transactions.

The Board Exam questions are based on the information provided in the prescribed handbook, and may contain practical applications of the principles discussed in the handbook. The Board Exam takes the form of a "monkey puzzle" or multiple choice question paper. You simply have to identify which answer is the correct one.

There are real estate agent training centres throughout South Africa, where you can attend classes and get thoroughly prepared for the Board Exam. But many prospective real estate agents order the prescribed handbook from the Estate Agency Affairs Board and study the material by themselves, before taking the Board Exam.

The Board Exam does not involve any information about the dos and don'ts of real estate agency as a business, effective marketing, or sales tips. It is all about the legal principles. You will have to bring those skills to the party yourself, or hope that your principal estate agent provides such training for you.

Practical Experience

Real estate agent candidacy only last for one year. This means that any candidate real estate agent, who has had a candidate real estate agent Fidelity Fund Certificate for a period of one year, automatically becomes a full status real estate agent, regardless if the agent passed the Board Exam or not.

Summary:

Find an estate agency willing to employ you (Real estate agencies are always hiring, so this should not be a problem.)
Apply for a candidate real estate agent Fidelity Fund Certificate
Work as a candidate real estate agent for a year, or write the Board Exam.
And voila! You are a full status real estate agent.

Easy enough?

Real estate agent personality

Whether the rewards outweigh the negative side of being a real estate agent really depends on the personality of the real estate agent. If you are a family-oriented person, someone who likes to spend a lot of time pampering yourself and indulging in time consuming past times, or someone who enjoys the more leisurely things in life, and you are really not looking to give those things up, becoming a real estate agent may not be the right career for you.

Getting settled

Getting settled into a real estate agent position in the South African real estate business can take six months or longer. During this "settling in" period, a real estate agent's income will fluctuate (probably wildly), or even be totally non-existent! Real estate agents usually work on a commission only basis. So, to get paid, you have to sell a property first. And getting to the stage of selling a property takes time.

A year of financial instability and struggling really does sound like an extremely long time. But that is how long it can take to get a foothold in the occupation of real estate agent. You have to remember that a real estate agent only gets money once the property is finally transferred from the seller to the buyer's name. Consideration all of the steps that are involved in the property transfer process, and the fact that the average property transfer takes between two and three months to complete, a time frame of one year is fairly reasonable.