Responsibilities of the estate agent
The Estate Agency Affairs Board (EAAB) determines the role and responsibilities of an estate in respect of the seller and the buyer, as well as other parties involved in a property transfer.
These responsibilities include:
- Acting honestly at all times
- Not proceeding without a mandate
- Advising the seller of the market value of the property
- Marketing the property effectively
- Expressing to a prospective buyer all the facts concerning the property which are reasonably within his or her personal knowledge
- Assisting a prospective buyer to make an offer on the property
- Negotiating the transaction and completing the offer to purchase by taking both the seller and buyer’s interests into consideration
- Advising the buyer in respect of financing of the purchase price by referring him or her to a mortgage originator if required
- Liaising with the transfer attorneys
The costs of an estate agent’s services
An estate agent who has been the effective cause of a property sale is entitled to payment for successful completion of these services.
The seller is typically responsible for paying the estate agent, and while there are some standards when it comes to the value of the payment, the specifics should be agreed upon between the seller and estate agent at the time of signing the mandate to sell.
The percentage commission (or set amount) should be clearly stipulated in the estate agent mandate as well as in the offer to purchase, and this estate agent commission percentage (or amount) will become payable to the estate agent upon successful completion of the sale.
An offer to purchase will also stipulate what will be deemed as a successful sale. For example, this may be when all suspensive conditions have been met in respect of the offer to purchase. In such a case, if all suspensive conditions have been met but the contract is then cancelled due to a default by either party, the defaulting party will be liable for the commission payment.
The estate agent’s commission is typically paid by the transfer attorney on behalf of the seller from the proceeds of the sale, upon registration of the transfer. Should the purchaser, however, pay a deposit into the estate agency’s trust account, this will form part of the commission earned and the balance of the commission will be paid by the transfer attorney upon registration.
The benefits of using a reputable estate agent
Since an estate agent can have a significant impact on the success of a property transfer, working with a reputable estate agent who has experience and local knowledge can be a real plus.
For example, a reputable estate agent will be able to assist a seller with an accurate property valuation. This will help in determining a reasonable asking price which will in turn positively impact the length of time it takes to sell the property. An experienced and reputable estate agent will also be able to offer the seller the best possible outcome by utilising their skills in marketing the property effectively, targeting the right audience and making the most of all platforms available such as printed materials, online portals and show days at the property.
The relationship between the seller and estate agent will begin with the mandate (whether it is a sole, joint or open mandate) and it is important that a seller fully understands all the terms of the estate agent mandate and what the estate agent’s duties will be. At the same time, it is essential that the seller declares all information including any known defects so that the property can be effectively marketed.
An estate agent’s responsibilities to buyers include offering valuable advice and information, such as statistics on recent sales in the area, information about facilities and amenities in the area, and the expected costs of monthly rates and levies. This information can help a buyer make an informed decision about the purchase.
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