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Real estate brokerages will be assessed under the Brokerage Offices Ranking System, a new initiative of the Dubai Land Department (DLD) that evaluates firms based on their performance, starting next year. The new ranking system was announced by Ali Abdulla Al Ali, Director of Real Estate Licensing Department at the DLD, during last week's Cityscape Global Real Estate Brokers Conference.
The first phase of the ranking index will be implemented in January. Around 3,550 brokerage firms and more than 7,500 registered brokers are currently operating in Dubai, according to the DLD.
Al Ali said the ranking criteria will be based on five factors and will have four categories — general, bronze, silver and gold. The firms will be assessed based on experience (15 per cent), number of sales transactions (30 per cent), adherence to real estate regulations (40 per cent), structure of the organization (10 per cent) and community activity (5 per cent based on corporate social responsibility initiatives and Emiratisation targets).
Brokerages that score 70 per cent or less will fall under the general category, 70-80 will be under bronze, 81–90 per cent will be under silver and above 90 per cent gold category.
Real estate brokers believe the new ranking system will help enhance customer services and improve industry practices. Dounia Fadi, CEO of Elysian Real Estate, welcomes the initiative.
''With this system in place, brokerages will watch what they're doing and make sure their staff [continue to] raise their standard of service, which is positive for the overall market,'' Fadi tells Property Weekly.
However, she believes the system will take time to be implemented fully. Fadi also says the steady influx of people is a factor in the growth of the brokerage business in the emirate, although controlling its growth also poses a challenge. ''I feel there is a strong need to start qualifying brokerages,'' says Fadi.
Another key challenge for real estate companies is retaining trained staff. ''In spite of strict UAE labour norms, there are always loopholes that allow the agents to move out of the companies that spent time and effort to train and educating them. [Staff is lost] to competing companies,'' says Fadi.
Other issues include sellers not willing to sign exclusivity contracts with the agent, which often results in property price fluctuations. Fadi says a system should be introduced to limit property multilisting.
Also, Fadi says at the time of property transfer both parties should be required by the DLD to present the check for broker fees and other mandatory documents such as the manager's cheque for the transfer fee and seller's check for the property purchase.
This is essential as brokers often have to chase after buyers or sellers for their commissions once the property transfer is approved by the DLD. Sometimes brokers even have to go to court, which is an added burden.
Mario Volpi, Head of Projects at Asteco Property Management and chairman of the conference, tells Property Weekly that the broker's job is becoming tough these days, especially if brokers are dealing only in secondary market, as locking a deal is purely in the hands of the client.
He adds that new initiatives and regulations may not be implemented perfectly from the outset, but they will ultimately reflect positively on the market.
He also talked about an app launched a few months ago by the DLD for brokers. He says the app's system of assessing brokers based only on property transactions is not the best way to gauge the performance of agents. The reason, he says, is that some companies assign administrative staff to complete the deals, while it is only the broker who gets the credit for the collective effort.
Al Ali agrees with Volpi that assessing brokers solely based on transactions has its shortcomings, adding that the system could be expanded in the future.
Nonetheless, Volpi says the new system is an important first step. ''The DLD's new ranking system will be a good opportunity for brokerages to increase their classification and know what they need to do, as each classification has set criteria and this will even encourage individual brokers to raise their game and improve the level of service.''
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Source: Hina Navin, Special to Property Weekly