He Said, She Said

The most common causes of Estate Agent commission disputes and how to avoid them.

Divorce Guidelines In & Out of Community of Property

Estate Agent commission, a fee that is due to the agent in exchange for the successful brokerage of a property sale, can be the cause of many disagreements if not clearly dealt with in the mandate or handled appropriately.

As part of a typical property sale, the seller is responsible for paying the Estate Agent commission which is calculated as a percentage of the sale price; this is the fee for finding a willing buyer and is due and payable to the Estate Agent once the offer to purchase has been signed by both the buyer and seller.

As with many elements in the property transfer process, there are potential pitfalls, and knowing what these are in advance can help prevent them becoming problematic later on.

For example, should there be more than one Estate Agent appointed to market the property, there is the potential for disagreements to arise when there are multiple offers received through different agents. Most importantly, once an unconditional offer to purchase has been accepted by the seller the commission becomes due to the agent that effectively caused the sale to be concluded. If a seller subsequently accepts another (possibly more lucrative) unconditional offer, the seller may be liable for commission on both the offer that results in the property transfer, as well as the offer initially accepted but subsequently cancelled.

Another situation which can result in complications is when the contract of sale is cancelled due to a breach by one of the parties. Although in the typical scenario, the seller is liable for the Estate Agent commission, in this case, it is the person who is in breach of the contract who will be held liable for commission.

It is always best to preempt such situations. To avoid confusion and potential disagreements, both buyers and sellers should pay close attention to the terms contained in the offer to purchase. In addition, the seller should be made aware upfront by the Estate Agent of what to expect through the sale process, particularly when working with multiple Estate Agents.

Should a dispute occur, however, litigation should be considered a last resort, as it can be a lengthy and costly process. Instead, it is always best to attempt to resolve this between the parties concerned, and where necessary with the facilitation of the relevant conveyancing attorneys.

Follow Snymans on Facebook for more legal advice, information and news about property.

Recommended for you

My name has changed - what happens to my property’s title deed?
Contractual Matters

Corporate actions and resolutions[post_view before=""]

In South Africa, the business and affairs of a company must be managed by its board of directors. As such, the board is responsible for the daily corporate and commercial affairs of the company.

Read More
Minors and immovable property
Contractual Matters

Defunct Homeowners Associations and Consents to Transfer[post_view before=""]

Title deeds of cluster developments commonly contain a condition which states that alienation or transfer of a property by the owner is not allowed unless consent from the Homeowners Association (HOA) is provided. Usually inserted by the relevant local authority when approving the cluster development, this type of condition also confirms that all subsequent owners of the property automatically become members of the HOA.

Read More
The difference between movable and immovable property
Contractual Matters

The conveyancing process explained[post_view before=""]

The conveyancing process starts with a signed Offer to Purchase and ends with the property being registered in the Deeds Office. But, there are numerous steps that need to be completed in between. Here’s a look at how the process unfolds.

Read More
Property Blog Articles | Advice | Contractual Matters | Market News
Contractual Matters

Your home loan is paid up. What happens next?[post_view before=""]

Often, a bond will be paid up before the owner of the property decides to sell it. Here’s a step-by-step look at what he or she can expect once they reach this impressive milestone.

Read More
Minors and immovable property
Contractual Matters

10 conveyancing terms explained[post_view before=""]

When it comes to buying or selling a property, it helps to have a basic understanding of the many legal terms involved in the conveyancing process. Here’s a look at the 10 you’re likely to encounter most often, starting with conveyancing itself.

Read More

Need more Snymans content?

Sign up for our monthly newsletter.

He Said, She Said

The most common causes of Estate Agent commission disputes and how to avoid them.

Divorce Guidelines In & Out of Community of Property

Estate Agent commission, a fee that is due to the agent in exchange for the successful brokerage of a property sale, can be the cause of many disagreements if not clearly dealt with in the mandate or handled appropriately.

As part of a typical property sale, the seller is responsible for paying the Estate Agent commission which is calculated as a percentage of the sale price; this is the fee for finding a willing buyer and is due and payable to the Estate Agent once the offer to purchase has been signed by both the buyer and seller.

As with many elements in the property transfer process, there are potential pitfalls, and knowing what these are in advance can help prevent them becoming problematic later on.

For example, should there be more than one Estate Agent appointed to market the property, there is the potential for disagreements to arise when there are multiple offers received through different agents. Most importantly, once an unconditional offer to purchase has been accepted by the seller the commission becomes due to the agent that effectively caused the sale to be concluded. If a seller subsequently accepts another (possibly more lucrative) unconditional offer, the seller may be liable for commission on both the offer that results in the property transfer, as well as the offer initially accepted but subsequently cancelled.

Another situation which can result in complications is when the contract of sale is cancelled due to a breach by one of the parties. Although in the typical scenario, the seller is liable for the Estate Agent commission, in this case, it is the person who is in breach of the contract who will be held liable for commission.

It is always best to preempt such situations. To avoid confusion and potential disagreements, both buyers and sellers should pay close attention to the terms contained in the offer to purchase. In addition, the seller should be made aware upfront by the Estate Agent of what to expect through the sale process, particularly when working with multiple Estate Agents.

Should a dispute occur, however, litigation should be considered a last resort, as it can be a lengthy and costly process. Instead, it is always best to attempt to resolve this between the parties concerned, and where necessary with the facilitation of the relevant conveyancing attorneys.

Follow Snymans on Facebook for more legal advice, information and news about property.