On Thursday--two days ago--I arrived in the second stop on my three-country African journey: Kampala, Uganda. The difference in countries was immediate to me: the hotel had a representative at the airport to greet me and assign me to a cab driver for the 40-minute drive to an exquisitely lovely Serena Hotel. Not long after check-in, I met with the two staff persons of AREA, The Association of Real Estate Agents of Uganda. Vincent, the CEO, and Catherine, his administrator, are young and passionate about organized real estate. The association itself is about 3 years old, and Vincent was its first president. He still maintains his own company which offers real estate, insurance, and mortgages. Both Vincent and Catherine speak excellent English, and are very computer literate. While I was there, their two-person office was a center of activity: in two days Catherine processed four new walk-in members. It seems AREA is offering a course next week, and every agent in town is interested in taking it. But in order to do so, they have to be a member. AREA has about 100 members currently, but at this rate they'll be expanding exponentially. (It was interesting to note that all four applicants paid their dues on the spot by transferring money from their personal bank account directly to AREA's, using their cell phone!) As in Kenya, real estate agents are not licensed. In Uganda, they don't even need to register with the government--they just say "I am a real estate agent". Uganda is completing some major real estate reforms at this time, however, and issuing a certificate to real estate agents to ensure basic skills and knowledge is in the government's immediate plans. Vincent says that the association and the government are in the final states of negotiation in an agreement through which AREA would become the accrediting agency for all real estate agents so again, this action will mean that all agents MUST belong to the association, and participate in its accreditation process. AREA hopes to announce this agreement at its first Annual Conference to be held in December. That will be a huge leap forward for AREA, which is an organization that is agent-based--no valuers and surveyors here! "What," I asked, "is the profile of your agent member? Who becomes an agent, and what do they have to do to earn money?" As I said earlier, agents don't have to have anything official to begin a career selling real estate. Most have a cell phone, but they do not have an office. "So if I wanted to buy a house or a condominium, how would I find an agent?" I asked. "Well," Catherine explained, "You'd see a flyer with a name and telephone number on a shop window or telephone pole. You'd contact the agent and tell him what you need. If he knew of something he would take you there. You would pay the agent by the hour, plus you would pay for any transportation fees. The problem with this method is, of course, that since they are getting paid by the hour, agents will take you to very unsuitable places, just to get more money." She tells me that she spent $400 looking for an apartment, and then found one that was suggested by a friend and the agent didn't participate in the transaction at all. In Uganda, $400 is a fortune, of course, so finding an apartment was very expensive. Most agents do not take exclusive listings, though this is a lesson that AREA is working hard to change. An agent can expect a commission on a small sale (of, say, $50,000) of 10%. However, the commission rate decreases as the property price raises, to the point that in a very expensive property sale, the commission to the agent might be only .05%. Ugandan real estate agents are specialists in geography and locations. They might confine their sales activities to a neighborhood, or perhaps two or three blocks on a residential street. They would become the neighborhood specialists who knew everything: who was sick, who wanted to sell a house, who was needing a new house for an expanding family. Often there's no real listing in existence, just neighborhood gossip, and one goes to the real estate agent, who knows everything. The agent's job is locating property in his neighborhood and putting buyers and sellers together. Once an offer has been written and agreed upon, the agent's role is pretty much over. I did spend some time with Nicholas, the current president of AREA. Nicholas owns a successful real estate firm, and works in development and property management. He depends on independent agents to assist him in finding properties, paying them referral fees for producing customers for the properties he lists and/or manages. Nicholas seemed quite prosperous: he has a driver, an SUV, and two cellular phones which rang constantly. He's quite passionate about the association, and about the education center project that the International Real Property Foundation is helping establish. Finally, the AREA wants to grow. Nobody knows how many people are selling real estate in Uganda, but AREA's goal is to bring them into the association and offer them education and a code of professional conduct. Someday, AREA would like to begin an MLS as well, and expand member services in a variety of other ways. The eyes of the staff and leadership come alive when they talk about what's ahead for their association. It's an exciting place to be, with the real estate world out there in front of them. And hey, AREA has been in existence less than four years, it has a hundred members, employs a dynamic and committed staff, and the very real possibility exists that they will become the credentialing agency for their entire country. In addition, the organization is scheduling its first annual convention (to which the Prime Minister is committed to attend) and it is a partner in a regional education center which includes three countries. It looks to me like a very exciting future for organized real estate in Uganda.
Posted via email from Judith's posterous
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