Between October and December, 2018, 77 house seekers in Lagos
were defrauded of N23.1 million. On Average, a house seeker paid N330, 000 to
dubious estate agents. Analysis shows that house seekers in the Mainland area
of the state were duped between N100, 000 and N500, 000, while those in the
Island area paid above N800, 000.
Despite the fraudulent activities of some agents, Lagos
residents' search for accommodation is increasing every day than people living
in the Federal Capital Territory, Abuja and Kano. From January, 2018 to
January, 2019, Lagos residents’ search for accommodation was 67%, while their
interest in knowing the extent to which they could be duped was 33%.
When Lagos residents’ interest in defraud was at 768 volume,
they had 27.48 average score in real estate agent representing 3.45%. When
Nigerians’ interest in defraud was at 1,271 volume, they had an average score
of 46.98 in real estate agent amounting to 3.54%.
These agents succeeded because of their syndicate approach to
marketing available and unavailable apartments to house seekers, knowing that 50
percent of the population in the state relies on estate agents when
searching for accommodation. The dubious agents appropriate cyclic network and
make it entangle for the house seekers to understand the embedded tricks within
the network.
For instance, when there are no landlords or house-owners, agents
will demonstrate to the house seekers that owners exist by using colleagues (agents)
as owners in proxy. When landlords exist, they resulted in having principal
agents who have access to the house owners. In most cases, the principal agents
only know one or two other agents. In situations like these, a house seeker who
transacts with sub-agents is most likely threading the fraud path.
Threat to Value Capturing
From the insights, it is clear that stakeholders in the real
estate industry need to tackle indirect property marketing and quackery towards
sustainable value capturing. There is no doubt the activities of quacks are
eroding value capturing and denting the image of the renting segment of the
industry. The failure to address the problem will continue to have impacts on the
value relative to the amount previously captured by professionals who follow
the rules of the industry and government regulations.
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