By Kirthi Hewamanne
It is an established fact that the Real Estate industry makes an important contribution to the economy of a country and to the welfare of its people.
Housing is a key factor in measuring the standard of living of a society, and is an indicator of the economic growth of a country. It is said that the total value of buildings and housing stock of a developed economy is the greatest single source of invested capital and the revenues generated from this sector represent a large slice of the country’s national income. A significant number of the working population of such countries is either directly or indirectly dependent on this business or its related activity.
Real Estate is also of great social importance. The purchase of a house or a building block is the largest single investment made by an average person in his lifetime. Both the buyer and seller are involved in a transaction of bewildering complexity. No other transaction involves so many people eg. Real Estate agents, lawyers, property developers, architects, engineers, lending institutions, valuers, surveyors, and public utility employees. Sometimes several layers of government also may get involved.
In Sri Lanka, private sector participation in housing and property development has been in progress for the last 40 years. However, the industry has been unable to present an integrated service to the buyer or seller in a real estate transaction. Therefore, there is a definite need for professional Real Estate marketing and selling organizations in Sri Lanka. There is also a need for an active Real Estate Association with defined objectives, to meet urgent and fundamental challenges facing this industry.
The current status of the Real Estate industry in Sri Lanka brings into focus an almost complete absence of organizational, institutional, and training ingredients essential for a vibrant Real Estate industry. The consequences have been that, there are no accepted industry standards, professionalism and skills among many practitioners of the business.
This is in addition to poor marketing, and lack of information available to the public. To most people, Real Estate business means, merely introducing the buyer to the seller, and hence the term “broker”, has acquired a bad connotation among the public. Outside this popular notion, many buyers and sellers have little knowledge or access to the expertise that a professional practitioner of the trade can provide.
Demand for skills
It is recognized that a demand for professional Real Estate skills exists among the buyers and sellers, property developers, and other in the related fields. Such demand, to a large extent, is currently met in less than an ideal manner by a wide range of people.
They could be professionals in other fields, who have had no training in all aspects of Real Estate marketing. Therefore even people such as street vendors who are unable to provide a complete packaged of services in the best interest of the buying and selling public also act as “brokers”.
The Real Estate industry, therefore, faces a major challenge, and has a prime need to professionalize their services. Therefore, a Real Estate Association with professional practitioners will be the major instrument that will bring about this change.
The proposal is to set up an organized body of Real Estate practitioners or Realtors, with the descriptive title, “Real Estate Association of Sri Lanka”. The members of this Association shall include all genuine practitioners of the profession.
Associate membership status will be available to others in related professions such as, lawyers, architects, engineers, developers, valuers, mortgage brokers, financiers etc. At the inception, those engaged in the business of marketing and selling property can apply for Association Membership.
They will be the founder members. Subsequent members will need to complete a study programme and pass a written examination conducted by a recognized Real Estate Training Institute.
The end objective of the Association is to provide highly professional services to the buying and selling public and to keep the enthusiasm alive in the industry. In the developed countries it is a legal requirement that all practitioners of the real estate business must be registered and there are legally binding responsibilities that go with the profession.
Provide to all those engaged in the profession the opportunities to develop and improve their skills. All important step in this direction is the establishment of a Real Estate Training Institute, which will conduct training courses leading to the award of a diploma in Real Estate Marketing & Sales. Proper training shall be the comer stone in professionalizing the industry.
Formulate and oversee the implementation of industry-wise professional standards, ethics, and rules which the members are bound to observe. Expand the scope of the Real Estate services offered to the public, to include such areas as property management, financing, consultation on land assembly, land development and planning, and condominium, in addition to many more. Improve marketing and sales infrastructure.
Sharing marketing info
A first step in this direction is to facilitate Members to share and pool marketing information and create a comprehensive database with multiple listing of the properties and services available. Access to such information to be made easy through the print media (newsletter) or the electronic media ( World Wide Web ). Develop a close liaison with related professions such as lawyers, architects, engineers, the construction Chamber, Valuers, Property Developers, Lending Institutions etc. Provide an impartial and ethical professional marketing service for financial institutions, as well as the borrowers, in respect of Power of Sale and Foreclosure situations.
An organized body of Realtors acting in the pursuit of the above objectives will be of immense benefit to its Members as well as to the country at large in the following manner. The Real Estate profession: By improving the professional standing of its members and enabling it to act as any other recognized profession in the country. Furthermore, a vibrant and an expanded industry will result in higher potential earnings, which its Members well deserve. The construction industry: The Realtors provide the marketing interface between the sellers and the buyers. Efficient and professionally competent service in this field will no doubt be an impetus to the building industry.
The economy: The building trade and transactions in housing are considered to be a barometer o f economic growth and welfare. An effective body of Realtors will create more economic activity even in lean times.
The Association will function as an independent body not affiliated to any other organization or interest group. Once the concept is accepted, one of the first tasks will be to draw up a constitution for the Association, and be formally adopted by ratification by its general membership.
The governing body of the Association shall be a council comprising of elected representatives of Realtors, and persons of standing in the commercial world who are able to make a significant contribution to the Association’s activity. The Association will require to have its own office premises with dedicated staff, and facilities to manage its database.
The foregoing identifies some of the major pressures facing the industry, in a period of rapid social and economic transformation. There is a clearly identified demand for professional real estate services, and wide opportunities also exist for realtors to branch out into more specialized services, other than brokering. The proposed Association will, no doubt, be of immense benefit to its Members, as well as to the country at large.
(The writer is a graduate of the University of Ceylon, Peradeniya. Award winning Realtor, with wide experience in all aspects of Real Estate including specialized knowledge of the Condominium concept. Held Membership in Canadian real Estate Association, Ontario Real Estate Association, London-St. Thomas Real Estate Board, Ontario, and was a member of the Realtor Political Action Committee, Canada.E-mail : [email protected])