As the property market continues to heat up and shortages of homes for sale in certain areas and price brackets start to develop, hopeful buyers and investors are increasingly turning to estate agents directly and paying them a fee to go out and find suitable properties.
“Homeowners and sellers do need to understand that any agent who introduces a buyer in these circumstances is working for that buyer,” said Gerhard Kotzé, MD of the RealNet estate agency group.
“The agent’s primary responsibility will be to act in the interests of the buyer. That could include negotiating to try to secure the property at the best possible price.”
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He said home sellers who have already given a different agent a mandate to market their property should be wary of accepting an offer from an agent who scouted their home on behalf of a buyer.
“This could give rise to a ‘double commission’ claim. The reason is that the agent who introduced the buyer might claim that they were the ‘effective cause’ of the sale and thus entitled to a commission.
“However, if the sellers agree to this, the original agent with the mandate could then launch a claim against them for breach of contract and damages equal to the amount of the commission already paid.
“This can be avoided if the sellers tell their original agent about the offer brought by another agent and ask for a written indemnity against any later legal claims for damages before they accept the offer from the second agent.
Kotzé said home sellers should be wary of giving mandates to multiple agents simultaneously.
This can lead to disputes over commission and again end up with them having to pay twice for the same service.
“What might happen, for example, is that a prospective buyer views the property through one agent and then, at a later stage, decides to purchase but makes an offer through a different agent who also has a mandate.
“Both agents might feel that they were the ‘effective cause’ of the sale and entitled to the commission.
“If the sellers want to avoid a ‘double commission’ situation they will again need to secure indemnity against legal action and, ideally, an agreement for the agents to split the commission before they accept the offer to purchase.”
He said the seller may not be aware that the buyers have engaged with more than one agent.
“To avoid this ensure that any offer to purchase made in a multiple mandate situation contains a clause in which the buyers warrant that they did not view the property through any other agent and indemnify you against any claim by another agency.”
A better alternative is to do your homework and choose one agent.
Contact the newsroom by emailing:
Marietta Lombard (Editor) germistoncitynews@caxton.co.za, or (Journalists) Busi Vilakazi busiv@caxton.co.za , and Lebogang Sekgwama lebogangs@caxton.co.za.
