SA Property Advice - The Consumer’s Guide to Buying and Selling a Home (Part II)
Part II – Consumer’s Guide to Selling
Selling a home, is probably the largest decision most consumers will make, yet they often take less time when doing so than they would when, say, buying a new car. That is simply because selling immovable property is unfamiliar territory to most people who, as a result, really do not understand the process or know what questions to ask.
Working with an estate agent
While you can sell your home without using the services of a registered estate agent you must remember that this can often be a very complicated process, especially if you do not have any experience in doing so.
Some of the questions that will arise when selling a home include:
• What is the best possible price for your home?
• Where do you find a buyer?
• How do you qualify a buyer?
• What facts must you disclose?
• What paperwork is required?
• Will the contract of sale be legal and binding?
• How is ownership to be transferred to the buyer?
• What do you do about existing mortgage bonds?
• Does the buyer qualify for mortgage finance?
• Who will ensure that you get your money?
The registration of estate agents
It is important for you to know that the person who you select to market your home for sale must:
• Be registered with the Estate Agency Affairs Board (EAAB); and
• Have been issued with a valid fidelity fund certificate, or licence to operate as an estate agent, by the EAAB.
Before you deal with any estate agent you should always ask that estate agent to show you the fidelity fund certificate that has been issued to him/her by the EAAB. Carefully check the fidelity fund certificate to make sure that it is valid for the current year. If you have any doubts contact the EAAB for assistance.
How do you choose an estate agent?
Ask family, friends, neighbours and fellow employees who have recently bought or sold a home to recommend their choice of estate agent to you.
You could also telephone or visit several local estate agency firms to find out if they have experience in selling homes that are similar to yours.
Looking at advertisements in the news media and using the internet are also good ways to find estate agents who specialise in selling homes in your area. Get as much information as you can on:
• Their background;
• How long they have been in business;
• Some of their previous clients;
• Their levels of knowledge and expertise; and, especially
• Their fees or rates of commission.
What will an estate agent charge to render an estate agency service?
Estate agents, in general, work on a commission basis and are paid for their services once the sale of your property has been successfully concluded. As the seller you will be asked to agree to pay a fee, in the form of a commission, to the estate agent. The commission will usually be calculated as a percentage of the total selling price of your property or may, sometimes, be a fixed monetary amount. Check whether or not the commission includes VAT There is no fixed commission tariff. You must negotiate the rate of commission with your estate agent.
Offers to purchase
Once an interested buyer has been found a written Offer to Purchase your home will be prepared, usually on a standard form. Make sure that your estate agent explains the process of receiving and reviewing offers to you. Do not be surprised if you are presented with offers at prices that differ substantially from your asking price.
Your estate agent must present all written offers that have received for your home to you for consideration. If several offers are brought to you at the same time you are not obliged to accept any one offer over another.
Your estate agent will help you to understand the terms and conditions in the offer(s) to purchase and will also give you advice that you may need. At the end of the day, however, the decision whether or not to accept an Offer to Purchase is yours.
Before you make a decision you may want the estate agent to prepare an estimate of the cash proceeds that you will receive when the sale is completed. This will be based on the sale that has been offered and the financing arrangements contained in the offers as well as the commission that you will have to pay to the estate agent, and the amount that you owe to the bank. You are under no obligation to accept any offer from, or to make a counter-offer to, the proposed buyer. Be aware, however if you reject an offer which exactly meets all the terms that you agreed to in the mandate you will be legally obliged to pay commission to the estate agency firm.
Giving a selling mandate to the estate agent of your choice
When you have chosen a professional estate agent to help you to market your home for sale, that estate agent will use market research methods, along with his/her knowledge, experience and expertise, to set the best possible selling (also called the listing”) price for your home. Remember that the selling price that you decide on must be attractive to potential buyers under current property market conditions.
After the selling price has been agreed on you will generally be asked to sign a mandate document (also known as a listing contract”) in which you instruct the estate agency firm to market your home for sale. Be aware that, once this mandate has been accepted by the contract comes into existence and that both parties are bound by the terms and conditions of that mandate.
What costs can you expect to pay as seller?
As the seller you will have to pay the following costs:
• The commission that you agreed to pay to your estate agency firm;
• The legal costs for the cancellation of any existing mortgage bond that is registered over the property; and
• Rates and taxes on your property, as well as levies in respect of a sectional title unit.
What to do if you have complaints about an estate agent
First discuss your concern directly with the estate agent you have been dealing with. If the matter cannot be resolved in this way you should then approach one of the principal estate agents who manages the estate agency enterprise. Many of your concerns will probably be able to be settled in this manner.
If you still receive no satisfaction you can look to the EAAB for further advice and help. The compliance staff of the EAAB may be able to assist in informally resolving your concern. Should this not be possible you may be asked to lodge a formal complaint against the estate agent concerned for further investigation, especially if the matters complained of concern a breach of the Estate Agency Affairs Act.
The EAAB’s compliance officers are not able to give you legal advice. The EAAB, similarly, cannot grant any civil redress or relief to complainants since this is a function of a court of law having jurisdiction. You will be advised if your complaint is civil in nature and, as such, requires legal, rather than disciplinary, action.
Courtesy: Agent – The Official Publication of the Estate Agency Affairs Board
“Redressing the Past, Building the Future and Guiding the Real Estate Business towards Professionalism”