One issue plaguing the local real estate market, in the view of Benjamin Tabone Grech, CEO of Engel & Völkers Malta, is the prevalence of agents engaged who do not have the vocational drive to work in the industry.
This, he says in comments to BusinessNow.mt, leads to a situation where local real estate agents provide substandard service, and which may result in buyers/ tenants seeking to bypass an agent, and thereby bypass agency fees.
The issue of bypassing agency fees was brought to light by Zanzi Homes and QuickLets co-founder and CEO Steve Mercieca, who, simply put, stated that should a prospective buyer/tenant not want to pay agency fees, they should not engage the services of an agent.
“We are not going to accept this anymore,” Mr Mercieca had said in a strongly worded statement.
“Sending your partner, friend, parents or colleague to go and see a property with an agent, then contacting the owner directly, is the exact same thing [as stealing]. It is not ‘clever’,” he continued.
Weighing in on the debate, Mr Tabone Grech highlights how in recent years, the real estate industry has been perceived as one where an individual is able to make a quick buck.
“This has made people join the business who don’t look at it as a vocation, or a career where they feel proud to provide quality service”.
Mr Tabone Grech, who is also Chair of the Building Industry Committee of the Malta Chamber, stresses that to provide a quality service, agents must be knowledgeable on different property types, building permits, licensing requirements, how title transfers work and how to handle the process.
“When an agent who is working with a buyer, whether with a small or big budget, and has a lack of knowledge, or is not transparent about a property’s plans, when the owner purchased the property, when the latest conversion took place, whether the property has a well or not or any other detail, that buyer is not going to feel respected or like they are being served professionally”.
According to Mr Tabone Grech, situations such as that described above can give rise to scenarios where clients try to bypass the agent. He acknowledges that a certain level of theft will always take place but called for the industry to understand the bigger picture as to why this happens, and learn from it.
“When a buyer is about to spend on such a large commodity, they expect agents to be knowledgeable and prepared. If there is a lack of knowledge on the agent’s part, how can the buyer and/or seller respect the agent?”
Up until this year, real estate agents, property brokers, branch managers and property consultants required no specific licensing to be engaged in the profession.
As of 1st January 2022, however, those working in the professions are required to get a state license, following the attainment of a certificate in real estate, by studying the legal, financial, technical and communication issues related to property sales/letting and its marketing.
Asked whether he feels the new licensing requirements will correct the issues he describes, Mr Tabone Grech says this will bring in a minimum standard of knowledge, but it is social responsibility within the industry that also needs to change.
Pressed for what he means by social responsibility, the CEO says that theft within the industry is something that will always happen, but one can make it less likely by “dealing with the issues at hand and understanding why a situation is arising”.
He says a level of respect between buyer/tenant and agent, and a level of knowledge and professional service on behalf of the agent, will reduce instances where the agent is bypassed.
Pressed for more concrete solutions to the issue of bypassing agency fees, Mr Tabone Grech is a strong supporter of hard data on sales and letting being released periodically, allowing all players in the real estate industry – whether buying, selling, landlord or tenant – to be more knowledgeable about the local property landscape.
“The dearth of information about the market gives rise to a lack of transparency. How many sales are actually carried out each quarter? What kind of properties? What is the market share of agents? This kind of information would provide for a healthier industry, with more respect being shown all around as people would be more informed about the market.”
He alludes to the requirement, which came into force in January 2020, for private rental contracts to be registered with the Housing Authority. In a recent press statement, the authority revealed that 30,000 rental contracts were registered in 2020.
“People made such a big deal and were against this requirement, stating that it will push up the price of renting, or that landlords will take their properties off the market, but what it did was provide protection for both parties and created organisation and removed the “cheating” aspect”.
As part of his duties as Building Industry Committee Chair with the Malta Chamber of Commerce, Mr Tabone Grech shares that the entity is proposing for an owner’s manual to be included with the title transfer upon the sale of property. This would include a list of all contractors who worked on the property, where wires have been laid and all technical details buyers would find immensely useful.
An owner’s manual is the start to building a more professional industry with expertise, according to Mr Tabone Grech making buyers and sellers more comfortable with the transparency.
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