Estate agents are notorious for bamboozling property buyers and sellers with convoluted jargon and intricate sales tactics. A rookie (or rusty) buyer or seller can be easy pickings in this competitive industry. Understandably, in their defence agents are often surviving in a dog-eat-dog industry and are passed on legacy tactics to survive this challenging career.
Grant Smee, CEO of Leadhome, offers practical advice for sellers venturing into the South African property market.
The first step for any seller is selecting a property professional to market and sell your home. This decision involves entrusting them with your property sale, relying on their expertise to provide honest feedback, evaluations, and guidance to secure your home’s best market value. Often skilled in their craft, estate agents sometimes overwhelm sellers with complex terminology and varied sales strategies. And usually; this early in the game, it is all about the mandate. Mandates mean money.
Understanding mandates and multi-listing
An open mandate allows multiple agents to market your property simultaneously, with the agent who secures the sale earning the commission. It offers broad exposure but can result in varied marketing efforts. On the other hand, a sole mandate grants exclusivity to one agent, allowing them to focus their efforts on selling your property swiftly and efficiently.
A multi-listing mandate is a viable option for those looking to maximise exposure, as more buyers are strategically placed to view your home. Picture this: agents gather for an open day at your property, evaluate its potential, and list it via the Multi Listing Service (MLS). This strategy enhances visibility as listings circulate among member agents, increasing the likelihood of finding the right buyer.
However, it can quickly evolve into a nightmare bunfight, too. In a multi-listing scenario, multiple agents may aggressively pursue the same buyer, potentially leading to confusion or disputes over who introduced the client first or is entitled to the commission. Without clear agreements and communication, this can result in conflicts and turmoil among sellers, agents, and buyers.
Signing the right mandate for your needs
Choosing between mandate options depends on your priorities. An open mandate spreads the net wide but can lead to diluted efforts from multiple agents. Alternatively, a sole mandate focuses on marketing efforts, potentially accelerating sales with dedicated strategies tailored to your property. It is important to note that a multi-listing mandate, while enhancing visibility, is not always suited to every client as it can be a frenetic and busy process. For those seeking maximum exposure, however, it allows multiple agents to market your property, increasing the chances of finding the right buyer and selling the property quickly.
Commission payments and legal clarity
Commission rates in South Africa are negotiable, typically ranging from 5% to 8% (plus VAT) of the sale price. At Leadhome, we do things differently by offering a flat fee commission arrangement, providing sellers with a transparent alternative to traditional percentage-based commissions. Sellers and buyers must always remember that these commission rates are negotiable.
It is important to note that the seller usually selects the attorney who will assist with the transfer of the property from the seller to the buyer’s name or entity. Sellers have the right to negotiate these rates at any stage of the sale process. Formalising these agreements in writing is crucial to prevent misunderstandings down the line. Ensure clarity on when and how commissions are payable to avoid legal disputes.
Getting your documentation ducks in a row
When listing your property, gather documentation such as proof of ownership, rates clearance certificates, and compliance documents. These ensure legal compliance and smooth transaction processes, providing peace of mind for both parties. Signing up for mandates and agency agreements can be laborious, but many of these documents are in place to protect you. Therefore, it is advisable to complete them as thoroughly as possible.
Later in the sale process, you will also need to obtain electrical clearance and beetle certificates, as well as a tax clearance certificate, to complete the transaction and comply with legal requirements, but that is a whole tutorial on its own.
Be warned
Sellers should exercise caution when committing to long-term mandates without periodic reviews. Understand the marketing strategies proposed by your agent, including timelines for updates and the scope of their responsibilities. Seek legal advice if you need clarification on any contractual terms to safeguard your interests. Getting a lawyer or a legal expert in the field of property contracts is advisable to look over your documents before you agree and sign on the dotted line.
Released for Leadhome by Vanessa Northing
