Under South African law, the seller is the one who pays the estate agent's commission. You would think that because of this, and the sums of money involved, sellers would interview their agents with care, choosing the one who not only offered the most, but was willing to back up what they were saying in writing. Sadly, more often than not, this is not the case and most sellers simply hand the job to a number of agents in a ‘shotgun’ approach and hope for the best.
This is strange. Unlike their UK counterparts who charge in the region of between 2 and 3%, South African agents earn much higher commissions – on average 7% of the selling price, plus VAT. Before everyone starts shouting that this is ludicrous and commissions need to be investigated, the average South African agent does far more than his fellow agents in the UK. But does this mean that South African sellers are getting good value for money? Well, that depends.
There are good agents and there are bad agents, and there are mediocre agents and there are outstanding agents – if you want to get value for money and sell your house at the best price in the shortest possible time, you need to choose an agent who is up to the task. This is a fairly easy exercise. When sellers list their properties they need ask a few basic questions to ascertain not only if the agent can do the job, but how he intends doing it.
If the agent says he will advertise the property, ask where, when and how often. If an agent says he will put the house ‘on show’ again, sellers need to ask when and how often. This is particularly important if the seller is giving an agent a sole mandate. It is vital for sellers to make it clear to any agent they employ that if promises are made and not kept, the seller has the right to cancel the agreement and move on to someone who can actually do the job.
Price is always going to be the most contentious issue. Choosing an agent who promises the moon but who can’t back up what he is saying is a fairly short-sighted approach. This is a common problem – everyone believes that their house is worth more than it actually is and most are inclined to listen to agents who agree with them. However, the mistake is pretty easy to spot and will present itself in one of two ways. Either no one will view the property, or they will come in their droves – and then walk away without making an offer. The quicker the seller realises that a mistake has been made, the better the outcome. History has shown that the initial marketing period is the most important and generally speaking, if buyers are not bashing down the door to get a look-see within a month, the seller needs to re-evaluate their price.
That said, there are large numbers of agents who will simply refuse to market a property they feel is overpriced. Successfully marketing a home takes a great deal of time and money. A good agent who knows that a property is never going to sell at the inflated price is not going to put himself out on a limb, knowing that it is extremely unlikely that he is going to get a return on his investment. It’s a buyer’s market, and buyers are fussy.
Sellers have every right to demand good service, but strangely enough, it appears that many estate agents get away with murder. Whether this is due to the fact that no money changes hands until the sale has been concluded, or because the seller just accepts his lot and expects the worst is not clear. The sad thing is that there are agents out there who are really good at what they do. They are professional and will get the property sold, regardless of the economic climate. The ball is in the seller's court, and choosing the right agent could result in a winning game, set and match.