A newly married couple in Lagos recently got swindled of over a million naira. They had paid two years rent to an estate agent for a four-bedroom flat that was shown to them shortly after their wedding. On the day they were supposed to move into the apartment, they were shocked to find out that four other people had paid the same estate agent varying amounts of money for the same flat without the knowledge of the landlord. They all had the keys to the apartment and when they tried to contact him, he was nowhere to be found.
On the flip side, a landlord in the same city has never had it good until he decided to hire an estate agent who serves as property manager for his three houses. According to Jide Badmus, “rents have been paid late, but they have been paid. And not only were rents paid, but late fees were collected when necessary. Repairs have been made to the house, but I haven’t had to be at the property while those repairs were made. My life has never been more peaceful”.
Whether buying, selling or renting a property, you face the decision of whether or not to hire an estate agent. Many have had a trail of experiences, both good and bad, with the estate agents they have hired to help them find properties to buy/rent or those they have entrusted with their properties to sell or rent to tenants. In today’s society, the cons of hiring an estate agent seem more pronounced as many have sour tales to tell. However, hiring an estate agent is an option that still has its pros and cons.
The pros
There are many benefits of using an estate agent, especially to property owners, when renting out their property. Hiring an estate agent gives you access to someone who (most likely) has experience in the housing market, who understands the negotiations, legalities and paperwork required to buy a house.
“A lot of the legwork is done by my estate agent,” said Richard Okoro, a Lagos property owner based in London. “He also knows where to find the best deals and how to book viewings and that is very important to me because I don’t have the time for such.”
An estate agent can also advise you whether your property is up to a suitable rental standard, and can supervise any maintenance work needed to protect your investment. He or she can manage your property if you don’t live nearby, as relying on family and friends to manage your property can put a big strain on relations.
Otto Garba, another property owner in Lagos, recalled how his cousin collected some rent on his behalf and never gave it to him. “The last time I travelled, I left my property in care of my cousin,” he said. “Before I returned, he had collected tenants’ rents worth over a million naira and never gave it to me. I couldn’t report him to the police because he is family. I regret not using an estate agent because if he was hired, I definitely would have had him arrested.”
The cons
Hiring an estate agent is costly. This is one of the major reasons property owners shy away from them. Most agents charge between 2% to 10% of the total rent/sales cost as their charges. In addition to these charges are often maintenance fees, service charges, tenant renewal fees, set up fee and so on.
But while the cost is just one of the deterrents, most property owners argue that they can do all the things an agent can do, which include valuing a property, advertising, carrying out maintenance, collecting rent and more.
“Anyone can become an estate agent,” said Bola Akeju who once had an unpleasant experience with an estate agent. “There are no qualifications so a large number of fraudsters and shady people enter the profession, duping innocent people of their money and property. An estate agent may give an unrealistic value of your property just to get your business. Then drop it later on.”
Common tricks used by estate agents
Two of the most common tricks used by estate agents are overvaluing and undervaluing a property. Sometimes, they suggest a selling price above the market price in order to entice the seller into signing a contract with them. They could also sell or rent a property at an overvalue to an unsuspecting and naive buyer. In terms of undervaluing a property, they do this to the seller to sell the property to them at a value lower than it is actually worth.
Bankole Iyiola, the founder of HTF Properties & Estate Agents, however, argues that the advantages of hiring an estate agent far outweigh the disadvantages. “There are so many things a property owner cannot do for himself,” he argues. “In many ways, it depends on your unique situation — that determines whether or not you hire an estate agent. Agents usually don’t bind their clients contractually so if you hire someone and you’re not getting value for your money, you can hire someone else.
For property seekers, however, when renting a property, it is important to conduct necessary investigations on the integrity of the estate agent and find out as much as you can about the ownership before paying for a property.”