Everything you need to know about Estate Agents
There is a series of books called A Series of Unfortunate Events, in which one of the characters has an irrational fear of real estate agents. She fears them going to her house and meeting them. It’s a silly story but it kind of shows how we don’t really know what real estate agents do.
Real Estate Agents – or Estate Agents – are people who are qualified and licensed to represent buyers or sellers in property transactions. They are bound by state-mandated processes and must adhere to a strict Code of Conduct. They can list homes for sale, help buyers navigate the process of buying a property, show homes to prospective buyers, and handle the paperwork of the property transaction. This is in conjunction with marketing the homes they list for sellers by organising photo shoots, writing attractive copy for the agency’s website and advertisements, placing the listing on third-party property websites and social media, and organising and running show days at the property.
Estate Agents can also help you with rentals and a lot of the time, while private rentals are done through the owner, commercial rentals are almost always done through an Estate Agent.
1. Types of agents
All real estate agents, or Property practitioners as they are now known in South Africa, are required to be registered with their regulating body, the Property Practitioners Regulatory Authority (PPRA), and must hold a Fidelity Fund Certificate (FFC). Every agent is required to complete a specific qualification and gain experience in their field. An unqualified agent is known as a Candidate Agent and is required to start the process of obtaining their real estate qualifications as soon as they are issued with an FFC by the PPRA. Once qualified, an estate agent will be granted the designation of Professional Practitioner Real Estate (PPRE), and advanced studies can be achieved for agents who want to own their own operation, being the Master Practitioner Real Estate (MPRE). Property Practitioners are regulated by the Property Practitioners Act and a Code of Conduct.
Whether it is an estate agent, a broker, or a property practitioner, these people need to be qualified or mentored by qualified colleagues to handle all types of transactions.
Selling agents are agents who provide their services to people looking to sell their real estate properties only. These agents will typically represent the seller or owner of the property that is being sold, and they will be the ones dealing with the potential buyers or their agents. Buying agents help investors who are looking for a property to purchase in the market. A real estate buyer agent will help the buyer investor throughout the entire process of finding, analysing, and comparing a property as well as the process of negotiating and closing the deal.
2. How can an estate agent help?
Aside from the general points mentioned before, an agent makes it their business to help buyers to apply for finance by putting them in touch with bond originators, and most agents would advise buyers to obtain pre-approval for finance from a bond originator before starting the process of buying a property.
They can connect sellers with professionals such as home inspectors or compliance companies to assist in obtaining the required certificates of compliance when selling. They can also negotiate an offer on your behalf – whether you’re buying or selling – and communicate with all parties throughout the process of the sale.
An agent can help navigate the home loan process, advise you on properly pricing your home as a seller, and screening potential buyers or renters to make sure they qualify financially and are a good fit for rental. They will attend home inspections and appraisals on behalf of sellers and represent their clients in all transactions. Agents cannot – by law – force you to do anything you don’t want to do and are required to get your approval to move forward with any transactions.
3. How to find an estate agent
Usually, a quick Google search would yield good results, and you will be able to find estate agents on the various property websites too, but chances are, someone you know has used a real estate agent in the past and you can ask them if they can provide you with a good recommendation. You can also look at current listings, take note of the agents, and contact them. The best way to find someone you can vibe with is to physically attend an open house and meet the agent involved. It’s important to find someone you’re comfortable with as you’ll be spending a lot of time together and they will be handling one of the biggest financial and safety decisions of your life.
4. Who pays the estate agent and how much?
Real estate agents get paid a commission on the sales that they conclude. Commission rates differ from Agent to Agent and the Agency they represent. The responsibility for paying this commission falls on the seller of the property and not the buyer. The commission is paid when all conditions in the contract have been met and when the property is transferred into the buyer’s name. The estate agent receives the commission from the agency provided they have been the ‘effective cause’ of the sale, which means they introduced a willing buyer to a willing seller. Long story short; if you’re selling, you pay a commission.
5. Are these fees negotiable?
Yes. Your agent will discuss their marketing plan and what services they will provide to you and for this, they will state what their service fee will be, and their commission. Even if your home is in a good position to be sold as it is well-priced, in a good area, in good condition, and with ease of sale being on your side, an estate agent may still hold out for a commission that is commensurate with theirs. Try not to treat the estate agent commission as an opportunity to save costs – the less you pay, the less budget they have for marketing your home and they may not have the opportunity to achieve the best price in the best time.
6. Can I choose my agent?
Yes. You can approach multiple agents or agencies and speak with the agent for your area or the areas in which you are looking to purchase and choose the right one to work with. Even though you are limited to the ones who work in those areas specifically, you can absolutely screen every single one if you want to and see if they are the right fit for you.
7. What do I need to look for?
Essentially, you are looking for someone who is good at administrative work, research, and marketing. Among these will be good people skills, amiability, and openness. Your agent needs to be punctual and responsible so that they show up to viewings on time and have the house keys with them! They also need to be courteous and kind even to the most annoying of potential buyers! Before meeting a real estate agent, you are fully entitled to thoroughly review their previous sales and seek advice from previous clients should that information be available.
Q: Should I engage with an agent directly?
A: Yes, contact an agent. Their contact details can be found on websites, signage and all their marketing material.
Q: Why should I trust an agent?
A: An agent has a line of command, and every agency has a Principal Agent, who is the person to speak to if you are not happy with the service or advice you receive from an agent. Remember, every agent must have a FFC with their regulating body, so check on this and ask what qualifications and experience they have. Trust will come from working together once you are comfortable that they have the credentials to represent you.