Project – The problems of proliferation of unregistered estate agents in agency practice
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Agency is described as a relationship existing between a principal and an agent, where an agent is given rights of authorization from the former to act on his behalf. Such relationship could be established when principals are convinced that the involvement of agents will produce more effective returns usually due to their vantage in training, commitment and conversance in the prescribed endeavor (Yavas, 2007).
Yavas (2007) also described agency as brokerage service, has been studied in real estate in relation to the impact of broker intermediation on selling price and duration.
Real estate agents obviously perform a middleman function in that they bring buyers and sellers together. They build bridges between people in search of landed properties and estate owners. Real estate is a special type of asset that almost everyone desire to own (Akpan, 2018).
Rabianski and Black (1999) noted that questions have been raised by professionals on relevance and effectiveness of the current increase of unregistered estate agents in the real estate market and thus reiterated that a lot still needs to be done to further improve the effectiveness of the market. Notwithstanding, more self-styled estate agents also emerged, and over time, the real estate business became marred by incompetence and unwholesome behaviours. Due to lack of control over the self-styled estate agents, there were many victims of obtaining and fraud. To safeguard public interests against unscrupulous practice of estate agency by unregistered estate agents and rogues in the 1970s and early 1980s, the Nigeria government and the professional bodies governing estate practices have enacted the guidelines and laws guiding the practice of estate agency in Nigeria (Oyedele, 2018).
The law establishing the profession of estate surveying and valuation in Nigeria included the estate agency as part of the functions of estate surveyors and valuers in Nigeria. Notwithstanding, presently in Nigeria it is all comers affair and there is an association of estate agents. Entering the real estate market is easy, and requires neither qualification nor previous experience, this gives every rank and files opportunities to practice or become estate agent with the requisite educational qualification and registration with right professional bodies (Bello, 2003).
1.2 Statement of the Problem
Nigeria in recent years has been flooded with developers bringing property into market for sale, rather than for the purpose of obtaining a stream of income in the form of rent. Due to the unique characteristics of related estate, the market for real estate all over the world does not conform to the definition of an efficient market (Amidu & Aluko, 2006).
An efficient goods market is one where the products have close substitutes, many buyers and sellers who have perfect knowledge of prices and goods exist there is little government interference and the productis easily transferable. Real estate requires professionals who possess an understanding of the processes to mediate between the concerned parties who include but are not limited to financiers, developers, sellers and purchasers (Ojo, 2004).
The rapid increase in the prices of real estate has made many investors and unregistered agents venture into real estate as a source of income. The practice of estate agency has for a long time been associated purely with the commercial transaction of letting properties for landlords, buying and selling of land, factories, houses, commercial premises, businesses as going concerns hotels and the ownership rights associated with them. The agents acts on behalf of the seller or on behalf of the buyer for a commission. In this regard, in addition to the firms registered to carry out this practice, there have also been a large number of estate agents practicing without any background knowledge and/or understanding of real property as a commodity and the real estate market as a special one, hence there is need to evaluate the proliferation of unregistered estate agents in real estate market (Olaleye, 2000).
Regardless of the above mentioned problems, the researcher therefore tends to access the problems of proliferation of unregistered estate agents in agency practice in Nigeria with particular reference to Lafia metropolis of Nasarawa State.
1.3 Aim and Objective
The aim of this project is the assessment of the problems of proliferation of unregistered estate agents in agency practice in Lafia metropolis.
To achieve this aim, the following specific objectives shall be pursued:
- To examine the concept of real estate agent
- To evaluate the activities of unregistered estate agent in real estate market in Lafia metropolis.
- To evaluate the impact of the proliferation of unregistered estate agent in real estate market in Lafia metropolis.
- To identify the problems affecting real estate agency in real estate market in Lafia, Nasarawa State and Nigeria at large.
- To recommend possible solution to the problems affecting real estate agency in real estate market in Lafia.
1.3 Research Questions
The study arose from the need to answer the following research questions:
- What is the concept of real estate agent?
- What are some of the activities of unregistered estate agents in real estate market in Lafia metropolis?
- What are the impacts of the proliferation of unregistered estate agent in real estate market in Lafia?
- What are the problems affecting real estate agency in real estate market in Lafia, Nasarawa State?
- What is the possible solution to the problems affecting real estate agency in real estate market in Lafia?
1.4 Scope and Limitation of the Study
This research is undertaken to carry out an in-depth assessment of the proliferation of unregistered estate agent in real estate market in Nigeria. The study is limited to Lafia metropolis of Nasarawa State in particular, the study seeks to understand how estate agency in Lafia metropolis can be made more professional and make the real estate market more accessible to investors by reducing the activities of the increasing number of unregistered estate agency in the study area.
1.5 Significance of the Study
The result of this study will satisfy the needs of investors who may want to venture into the real estate market in Lafia as it will educate them on the activities of the unregistered estate agent.
The needs of the professionals in the real estate market to know about the proliferation of unregistered estate agentswill be addressed therefore contributing to the practice of real estate agency professionally and if the research findings are implemented, estate agents will understand better their job descriptions and cope with the changing needs of a more vibrant real estate market.
Real estate developers/landlords and tenants will also benefit from this study since it will be brought to their attention why they should only do business with professional estate agents and therefore protecting them from fraudulent practices.
The study will also contribute to the wealth of knowledge, hence researchers and students who want to study further on the research topic will find this research very relevant.
1.6 The Study Area
The study area is located between latitude 8020N – 8038N and between longitudes 6034E – 7030E. it shares boundaries with Nasarawa Eggon and Wamba Local Government Area (L.G.A) in the North, Obi Local Government Area (L.G.A) in the South East, Doma Local Government Area (L.G.A) in the South-West, Kokona Local Government Area (L.G.A) in the West and Plateau State in the East respectively (Figure 1).
The climate exhibited in the area under study shows no difference from that experienced over other parts of the Nasarawa State, which is characterized by a sub-humid climate with two distinct seasons; dry and rainy season (Akwa et al., 2005).
The study area has population of 330,712 according to National Population Commission Lafia (2006). The area falls within the guinea savanna zone characterized by scattered trees and grasses. The geology comprised of the basement complex formation of North Central Nigeria with undulating low lands and network of hills developed on granites, magnetic rocks which are believed to be plutonic in nature but later exposed to the surface by geomorphic processes.
1.7 Definition of Terms
Assessment: According to Cambridge English Dictionary, assessment is the act of judging or deciding the amount, value, quality, or importance of something or the judgement or decision that is made.
Proliferation: proliferation according to Oxford English Dictionary is a rapid increase in the number or amount of something.
Estate: Cambridge English Dictionary define estate as a property or a large area of land in the country that is owned by a family or an organization and is often used for growing crops or raising animals.
Estate agent: Collins Dictionary define estate agent as someone who works for a company or client that rent or sells houses and land for people.
Real estate: According to Investopedia, real estate is property comprised of land and the buildings on it, as well as the natural resources of the land, including uncultivated flora and fauna, farmed crops and livestock, water and mineral deposits.
Market: According to business dictionary a market is am actual or nominal place where forces of demand and supply operate, and where buyers and sellers interact (directly or through intermediaries) to trade goods, services or contracts or instruments for money or barter.
Project – The problems of proliferation of unregistered estate agents in agency practice