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  • Ways To Sell Your Home

  • When you sell property you are selling a major financial asset. This will be an emotional and stressful time – particularly if you don’t understand the process.

    The good news is that after reading our expert guide you will be much better informed so you can just sell property with the minimum of fuss!

    Sell Property with a 5-step How-to Guide

    Step 1: To Sell Property should you use an Estate Agent or do a Private Sale?

    Using an estate agent to market your house is the traditional way to sell property. A great estate agent should be able to make the selling process as stress-free as possible and should be able to answer all the queries you may have along the way. They should be excellent marketers, good negotiators, able to finalise a sale on your behalf and do all the running around for you.

    Unfortunately there are also poor property agents who may in fact irritate potential buyers, not return your phone calls or emails, and present your home poorly. If, by some miracle, you still manage to sell your property you will probably feel upset about paying the estate agent’s commission.

    For this reason, some people consider selling their homes privately. Apart from saving estate agent commission, these owners prefer to be in complete control of the process. Private sellers do not have to know all the legalities (the conveyancing attorney will take care of the paperwork), but they do need to have a basic knowledge of what is legally required to enter into a viable and legal Agreement of Sale.

    The owner also needs the confidence and especially the time to be able to show people around their homes. Buyer enquiries do pose a potential security risk, as they could be potential crooks or worse looking for opportunity.

    Private sellers also need to remain calm if potential buyers pass unkind remarks about the property. However, the private seller’s greatest challenge is being able to negotiate without having a predisposition about the value of their own home (exceptionally hard to do) and further they need to have the ability to market their property effectively.

    Ultimately, to sell property, traditionally, you needed to make a choice between these two alternatives.

    At last, there is a real estate company that offers an innovative option that effectively gives the Sellers all the benefits of a great real estate service without charging ridiculous commissions – CommFREE, “committed without commission”

    CommFREE recognise that the “One size fits all” attitude that estate agents have been taught to sell for so many years, is no longer a viable proposition to most sellers.

    CommFREE offers an option whereby sellers only pay for the service they get. A consultancy fee if you will. And although CommFREE still offer the choice of a commission based service, CommFREE recognises the need for change. Sellers are far more content paying only for the service they get, saving them thousands of rand in commission from the sale of their property.

     

    Step 2: Determine an Appropriate Selling Price for your Property

    Choosing the correct price to market your property at is critical to achieving a quick sale at the right price. To sell property you need to set a price for your house that depends on numerous factors.

    When a seller instructs an estate agent to “Sell my house!” the agent’s first thought is usually “No problem – if your price is right!”.

    The point is: if you want to sell your house, you first have to be willing to accept a market-related price for it. For most sellers, this price is less than they expect.

    Sell My House! Pricing Considerations

    If you want to “Sell my house!” the price that you agree with your agent will depend on these factors:

    1. Your own research. You live in the area and will be able to get an idea of how many houses are on sale and how quickly you can sell property in the current market. If you don’t use an estate agent then this step will be critical for you. If you choose to use CommFREE, a CommFREE consultant will present to you a full comparative marketing analysis of what is happening with property sales that have happened and are happening in your nearby surrounding area. If you know what your neighbour sold their property for and further know how your home compares to theirs, it will give you a good indication of what you can expect to sell your own property for.
    1. What you owe on your bond. Ideally, the selling price should be greater than the outstanding bond on your house (plus any cancellation fees and estate agent fees) so that you don’t end up still owing money to the bank for your house after you have sold it.
    1. What other houses in your immediate area have sold for recently. It is important to realise that you need to look at the actual selling prices achieved (which means you need access to data from the Deeds Office), and that you compare your home only to other houses in your local area. Property prices do not always move up so be careful to only look at recent selling prices.
    1. What other houses in your immediate area are on sale for. Remember, the advertised selling price for a home and the actual price achieved are often very different. As a rule of thumb, the actual price achieved could be 10% below the advertised price. CommFREE save you a lot of time and effort by compiling all this information for you.
    1. The opinion of an experienced local estate agent. The estate agent should be able to give you a good estimate, but beware – some agents may suggest an overly optimistic value in order to win the mandate to sell your property. In a tough property market, an agent that gives you a valuation that seems high is probably not someone you should trust with selling your major asset. Using the CommFREE system, the agent gains no benefit by falsely inflating the value of your home
    1. The most recent municipal valuation. Usually this value will be below the current market price.

     

    Sell My House! High price or Low price?

    Your natural preference may be to ask a high price for your house. You may feel that if the high price doesn’t attract a buyer then you will have a second chance at getting buyers by lowering the price of the house later.

    This is almost always a bad move.

    A house on sale attracts the most attention by far when it is first listed. It is new, and potential buyers could be interested enough to take a look. If the price is too high most buyers will just ignore the house. People don’t like the idea of having to haggle with the seller in order to get a fair price. It is just too stressful. And, since there are currently so many properties offered at fair prices, why should they bother with an over-priced one?

    In the current market, to sell your house you must realise that buyers are looking for bargains or, at the very least, fairly-priced homes. Any estate agent will confirm that there is nothing as dead as a stale property listing. If your house ends up being on the market for a long time, don’t expect a buyer. Even if there is nothing wrong with your house, the mere fact that your home hasn’t sold for a long time will lead people to expect that there is.

    Don’t fall into the trap of pricing your home too high. You will lose all the potential early interest from buyers. It is much harder to sell your property if buyers have seen it advertised for weeks or months on end.

    There are thus 2 realistic pricing strategies to sell your house:

    1. market price
    2. Below market price.

    The first option for selling houses seems obvious but the second needs some explanation. If you price your property at a below-market price, you will get a lot of interest – much more than pricing it at a normal price, which will obviously increase the chance to sell your house significantly.

    But, you say, I will have to sell my house at below market price! Possibly. What could happen however is that you may receive multiple offers? In this scenario, it is often the case that the house gets bid up to the market price by eager, competing buyers. So you get your price by encouraging competition from buyers!

    Pricing at a below-market price is an adventurous way to sell a house that not everyone will feel comfortable with. If you really do need to sell your house quickly then it is worth considering. Remember, you only need to accept an offer that you are satisfied with.

     

    Step 3: Home Staging: Prepare your Property for Viewing Prior to Selling

    Your home must be appear attractive, both in photographs (for viewing on the internet or in print) and when a potential buyer conducts a viewing tour.

     

    To Sell a House, learn these Home Staging Secrets!

    What is home staging and how does it help to sell a house?

    You can only sell a house if buyers want to see it, and feel comfortable in it. Home staging helps achieve this.

    Home staging refers to the art of making your house look as attractive as possible without doing major renovations. If you sell a house, your home has to compete for attention with many other properties. So you need your house to make a good first impression, whether that is in online photographs, on show days or when a potential buyer comes to inspect it.

    Home staging includes techniques like opening the doors and windows, switching on the lights, or creating artistic interior decorations (perhaps by using cushions or furniture that you borrow for the purpose).

    Correctly done, home staging will increase the chances to sell a house. There are even specialists in home staging who will charge a fee for doing it for you, but it is also possible to do it yourself.

     

    How to Sell a House: A Home Staging Presentation Guide

    Don’t forget that buyers are trying to imagine themselves living in your house.

    So try to remember why you were attracted to the house when you bought it. What will you miss most when you sell and move out? This will help you to identify the most attractive selling points of your house which you can emphasise to potential buyers.

    1. Give your house some “kerb” appeal.

      Remember that when you sell a house many potential buyers will first drive past your home to see if it looks attractive. So do yourself a favour and make it as neat as possible, especially when viewed from the road:

      1. remove rubbish bins
      2. weed the garden, pick up leaves, cut the lawn and trim hedges or bushes
      3. have some colourful pot plants
      4. remove dirty old cars, bicycles, general rubbish
      5. oil the gate so that it opens without squeaking
      6. make sure the doorbell works
      7. clean the pool, if you have one
      8. if you have car, make sure it is clean and tidy
      9. fix any masonry cracks
      10. if you can, apply a fresh coat of paint to the door or fence or boundary wall.
    1. Clean, tidy homes with no clutter sell faster.

      Remember that a potential buyer wants to imagine relaxing in your house. Do you think this is possible if the bath is dirty, the shelves and walls are full of your old photographs, or the house smells of your pets?!

    If you want to sell a house by creating the impression of a clean, spacious shell that the buyer can dream about personalising, consider these home staging tips:

    1. Clean the bath
    2. If you have a shower curtain, replace it
    3. Clean the house from top to bottom. Watch out for grubby marks on doors, and dusty curtains.
    4. Store kitchen appliances so that they don’t take up space on the counters. Clear counters make the kitchen look bigger. If you have an appliance from a very expensive brand, you could choose to leave that on the counter. To sell a house the buyer needs to believe that he or she is making an aspirational purchase, so showing off a quality appliance could have the required effect!
    5. Pack away photographs to free up space and make the house less personal
    6. Pack away clutter – bits and pieces on shelves or in the rooms that make your house look untidy and cramped.
    7. Get rid of junk. When you sell your house you won’t want to take the junk with you so remove it now before buyers see it.
    8. Open the windows and doors to let the fresh air in
    9. Turn the lights on
    10. Have a bowl of fresh flowers on the dining room table
    11. Roast some coffee, or bake bread or cookies. These aromas are homely and warm
    12. Remove any large or excess furniture in a room that makes it look cramped
    13. If you have extra rooms, convert them to bedrooms which are always major attractions to buyers.
    1. Creative interior decorating.

      Ask a creative friend to make interior decorating suggestions, such as re-arranging the furniture or adding borrowed cushions or pictures. The result may be not be to your personal taste but could be more attractive to the average buyer. Remember, you want to sell a house to a stranger – so swallow your pride and make any changes that will help you achieve your goal!

    1. Use the right photographs.

      When advertising on the internet, the first or main picture of your home should be an exterior view of the house. (You should only show the interior as the main picture if you have a flat or apartment, and you should show the outside in another photograph.) Have pictures taken on a sunny day and preferably earlier in the morning or later in the afternoon so that the light is not too bright. CommFREE use professional photographers to get the best out of your home.

    The well-worn expression “First Impressions Count” is especially true when it comes to selling houses. In summary, if you want to sell a house, consider home staging an essential step to getting a quick sale at the price you want.

     

    Step 4: You Can Only Sell Property with Extensive Marketing

    A property that is not marketed may just as well not be on sale.

     

    Selling Houses in the Modern Era: Why Marketing is Different Now

    Estate agents selling houses used to do extensive print advertising but in our era the internet is re-shaping property marketing. Most estate agents in South Africa are aware of this, but few appreciate just how powerful the internet can be in selling houses, whether to local buyers or to those further away.

    On the other hand, many private sellers expect the web to produce hundreds of buyers, simply by listing on any old website and regardless of whether they are selling houses, cars or assorted junk!

    The reality is that online marketing is critical and effective – but selling houses online requires knowledge of which websites to advertise on as well as how to get the best out of all the digital mediums available.

     

    Marketing methods for selling houses in the 21st Century

    Let’s consider the ways that houses can be marketed, the old and the new:

    1. On a For Sale board outside your home. A great number of buyer leads may be generated by a simple For Sale board erected outside your home. These boards attract buyers physically looking in your area.

    This method of advertising will continue to be effective but inevitably will reduce in importance. The reasons for this are:

    1. fewer people than before will drive around a neighbourhood as a first step to finding a new house (since they can search online, petrol is more expensive and time is limited), and
    2. many municipalities in South Africa now restrict how many pointer boards can be put up so it is more difficult to find the houses selling in that area.
    1. In the print media (newspapers or magazines). Advertising in selected local newspapers is still common for estate agencies even though it is expensive. Except in some niche markets, print advertising is no longer as effective in selling houses as it was before the internet. Estate agencies often advertise simply for brand exposure rather than to sell their listed properties.
    1. Networking between estate agents Estate agents in an office or even between offices will often compare notes on houses that they are selling. Each agent may have a “buyer list” of potential buyers and could find a match between their buyer and the house that another agent is selling. Referrals between agents are usually restricted to the estate agents’ own national group, but there are formal associations between independent agents known as multi-listing networks. Although CommFREE has these relationships with independent agencies, they also have a database with an excess of 20,000 clients whereby, the system automatically generates a buyer property match. This gives CommFREE an added advantage of selling your property quicker and assisting in achieving the price our sellers are looking for
    1. On the internet. This is becoming increasingly important. In developed countries 80-90%of potential buyers start searching for houses on the internet. The percentage in South Africa is lower, but is relatively higher for younger people and the more internet-savvy. Whether selling privately or employing an estate agent, effective online marketing is crucial to ultimately selling your house. The large property portals (websites focused on selling houses) also have huge numbers of registered buyers who are contacted when a property matching their criteria is listed.

     

    Final Word: Selling houses by listing on the property portals

    With their vast audiences, the major property portals (websites focused on selling houses) are key to selling your house. However, because it is so easy to compare multiple properties online, it is essential that your property be presented attractively and priced competitively. Or your home will vanish in one click!

    There are many websites that allow you to list your house, whether privately or by an estate agent. Although it is true that the more websites you list on, the greater the chance of selling your house, the overwhelming majority of these portals are worthless because they don’t have large numbers of people visiting them. In the modern era where time is in short supply, marketing should be focused only on the recognised major portals that are selling houses in huge volumes.

     

    Step 5: To Sell Property you Need to Finalise the Sale Agreement

    (Note: this is not definitive legal or tax advice for selling property. That advice is best obtained from your conveyancing attorney.)

    A buyer that wishes to purchase your property needs to sign an Offer to Purchase or Sale Agreement, which will become binding once you sign it. If you are trying to sell your home privately, it is a good idea to get your conveyancing attorney involved before you sign.

    An Offer to Purchase document will state the amount that the buyer is willing to pay and any restrictions and suspensive or resolutive conditions that may apply to the offer. For example, the offer may be valid for only a certain period or it may be subject to the buyer getting an approved bond from a bank (very common).

    To avoid misunderstandings later, it is also always a good idea to specifically state articles that will or won’t be included in the sale – permanent fixtures and fittings are included, but sometimes things like chandeliers, curtains, satellite dishes etc. can be the cause for disagreement between the parties. If there could be doubt, make specific reference to these types of items in the legal document.

    Many buyers have trouble getting bonds from banks in South Africa, and this can cause a potential property sale to fall through. Most estate agents will offer to assist the buyer to get a bond by submitting a request to a mortgage originator. The mortgage originator sends an application for a bond to multiple banks. Estate agents will do this mainly in the interests of finalising the sale but may also earn a small commission from the mortgage originator if a bond is approved, although the amount is usually insignificant.

    The key individual in selling property is the conveyancing attorney. This attorney will do all the paperwork and make sure the title deed and bonds are registered. The conveyancing attorney is usually appointed by the seller but the costs are paid by the buyer. The banks generally appoint an attorney to handle registration of the buyer’s bond.

    Once all the documentation is finalised it is submitted to the Deeds Office for approval. This could take from a few weeks to 4 months.

    If the buyer wants to move into the property before “transfer” has taken place, “occupational rent” or “occupational interest” will have to be paid to the seller until transfer. Similarly, if the seller wants to remain in the property for a period after transfer has happened, he or she will have to pay occupational rent to the buyer. The monthly amount is usually stated in the Offer to Purchase agreement.

     

    The Next Step if You Want to Sell Property with an Agent?

    Private Sale or Estate Agency?

    To save on estate agency commissions, some sellers conduct a private sale of their property rather than use an estate agency.

    Although a private seller will save on agent fees, this could be a false economy. Property buyers often take the absence of a commission into account when they make an offer, and thus offer less for a private sale property – the reduction in the offer price being equivalent to the commission that would have been paid to an estate agent. The CommFREE option gives the seller all the benefits of having a full estate agency service and at the same time saving the seller thousands of Rand in commission.

    Overview of a Private Sale versus an Agent Sale versus a CommFREE Sale

     

    Private Sale of Property

    In a private property sale, the owner sets the selling price, markets the house, and shows buyers around the property.

    Assuming a serious and able buyer is identified, a conveyancing attorney then handles the legal matters and the paperwork. The private seller (property owner) may have to collect and drop off documents under the guidance of the attorney as well as arrange compliance certificates, and at the same time trust that the purchaser fulfils his obligations in applying for the necessary finance if applicable. The private Seller will do much more running around than if an estate agency were mandated to sell the property with a lot less risk and stress.

     

    Estate Agency Property Sale

    If the seller appoints an estate agency, the estate agent helps to value the property and is responsible for finding a buyer and closing the sale. The estate agent will help to co-ordinate the sales process but a conveyancing attorney will finalise the transaction, as is the case with a private sale. The owner’s involvement is usually restricted to preparing and tidying the home before it is visited by potential buyers.

     

    CommFREE Property Sale

    If the seller appoints CommFREE, the seller will receive all the benefits that a good estate agency will offer him and at the same time, have the benefit of saving thousands of Rand in commission.

    Is the marketing of a house done more effectively by an estate agency or by the seller in a private sale?

    There are a limited number of ways in which a property can be marketed. These ways include:

    1. Advertising in the newspapers and magazines
      Both a private seller and an estate agency can advertise in the newspapers, although some sections of the print media are restricted to registered estate agencies. As more and more people become acquainted with using the internet, this method is becoming less effective.
    1. Advertising on the internet
      Agents will upload the property details to their estate agency’s website as well as to other property sale websites (“portals”). Although the major property portals are well known, some estate agencies upload property details to only one or two of them. Top agents spend more money and upload to more portals. CommFREE subscribe to all the major property portals to ensure maximum exposure of any property listed by sellers with them.
    1. Putting up a For Sale board
      As a private seller, if you have an attractive, professional-looking For Sale board, then you should be able to compete with an estate agency. But many South Africans are suspicious of private sales, believing that there must be something wrong with the property or the seller! For these people, a “private sale” For Sale board may be less effective than a board from a reputable estate agency.
    1. Estate agency buyer lists
      Most buyers want to know they are getting the most suited home for themselves and for the best price. In order to do that, the buyers need to view a selection of properties for comparison. Private sellers cannot offer the buyers this comparison as they only have the one home to show, therefore most times, even if the buyer likes the property, they leaves to see another to ensure they gets the best available and never return. Experienced estate agents list these and other potential buyers who might be interested in your property, have a choice of properties to show buyers, giving them the necessary option to compare, and as such, have the greatest chance of negotiating an offer. If the seller doesn’t appoint an estate agent then they will have to do without this source of buyers.
    1. Networking amongst estate agents
      Estate agents normally have either informal or formal networks that help them to source buyers. These networks are clearly not accessible in a private sale transaction.

    Who is most persuasive in sale negotiations: a private seller or an estate agent?

    There is some debate about whether an estate agent or a private seller is better at getting a buyer to put pen to paper. Top estate agents are trained sales professionals and are thus probably more skilled at handling buyer objections and at closing a sale. However, owners know their house and area best and so buyers sometimes prefer being able to deal directly with them in a private sale.

    Some believe that buyers have to “fall in love with the house” in order to buy and that no amount of sales talk by an estate agent will get a buyer that doesn’t like a property to change their mind. However, as selling and buying a house is an emotional experience, it can really help to have an experienced estate agent as the intermediary between the two parties.

    Ultimately the success of a private sale depends on the seller’s marketing skills as well as their confidence and emotional maturity, because buyers can be very critical. When the property market is poor and buyers are scarce and wary, a great estate agent is often crucial to achieving a sale.

     

    How To Decide: Private Sale, Estate Agency or CommFREE?

    This is a summary comparison between private property sales, sales by an estate agency: and CommFREE sales.

    Advantages of Private Property Sales

    • You save on estate agency commissions, which can be substantial
    • You have control over the process and can show your house when it is convenient to you
    • You may feel it is safer since you don’t have to entrust your keys and alarm code to an estate agency (but you have to be present when people you don’t know enter your house).

    Disadvantages of Private Property Sales

    • You need to do much more work yourself such as determining a realistic selling price and showing potential buyers around your home
    • What you save in commission you may lose in a lower offer price for a “private sale” transaction
    • Realistically, you are less likely to find a buyer, particularly in a tough property market
    • You have to pay your own marketing and advertising costs, without necessarily knowing if you are exposing your home to its best effect.
    • You don’t have the training or experience of a professional estate agent and this can cause stress because you are taking decisions about (probably) your major financial asset
    • You have less experience in screening out time-wasters and other undesirable “buyers” than an estate agency does.
    • Because you probably don’t have the facilities to correctly qualify the buyer enquiries, you are subjecting yourself to a security risk.

     

    Types of Estate Agent Mandate

    If you want an estate agent to sell your property it is recommended that you sign a mandate with the estate agent upfront, authorising him or her to sell your property on your behalf. There are 3 different types of mandate that you could choose to sign with your property agent.

     

    1. Open Mandate with an Estate Agent

    If you want many estate agents to market your house at the same time, you could sign an open mandate. With this arrangement, whichever agent brings the buyer gets the commission and the other estate agents get nothing.

    In fact, an open mandate does not require you to sign the mandate agreement you can give a mandate in a variety of different ways such as: email, messaging, even verbal (although not recommended), but the Estate Agent is bound by the Estate agents Code of Conduct to receive such so that issues like the Selling Price, Commission Percentage are agreed in advance of a sale.

    As the seller, this must seem an attractive option because you have many estate agents selling for you and thus you would expect to get greater marketing exposure.

    But there are problems with going the open mandate route:

    1. Agents are not going to spend much time marketing your property because they know that there is a possibility that all their efforts could go unrewarded if another estate agent finds a buyer first. Consequently, agents will spend less money on advertising your home. Agents will put a For Sale sign outside your house and list your property on their company website (both of which are essentially free to do), but probably won’t do much more than this.
    1. Since the estate agents are effectively competing against each other to get the sale first, a property agent who finds a potential buyer will be so keen for you to accept the offer that he or she may put pressure on you to accept the price offered, even if it is lower than what you would have wanted. So an open mandate creates a situation where the estate agent ends up working more for the buyer, not for you, the seller.
    1. You will have to co-ordinate home viewings with a number of different estate agents, which can be quite a hassle since each agent will need a key, alarm access etc.
    1. Each agent will put up a For Sale sign outside your home. This can create the impression that your house is less exclusive or that there is something wrong with it and/or you are desperate to sell. None of these impressions will help you secure a sale at the right price.
    1. Once a sale happens there is a risk that you might have to pay commission to 2 estate agents, each of whom may have had a claim as to why they were the “effective cause” of the buyer.

     

    1. Multi-listing Mandate with an Estate Agent

    Some estate agencies have a multi-listing (“mls”) arrangement with other agencies. What this means is that after you sign the multi-listing mandate with the “listing agent”, your property details will be sent to the other member agencies in the multi-listing group.

    These other estate agents can then also market your property and will approach you directly if they think they have a potential buyer. If one of these other agents does find a buyer, then the commission is shared (usually equally) between the listing agent and the referring or “selling” agent who found the buyer.

    The multi-listing mandate may be called a “letter of authorisation” and is technically a shared sole and exclusive mandate (see explanation of sole mandate, below).

    In principle, this sounds like a good arrangement to get competition going amongst the estate agents. However, in reality there are disadvantages.

    In order to be part of a multi-listing arrangement, the listing agent sometimes must agree to a certain commission percentage which cannot be reduced. (As an aside, this is could be considered price-fixing and there are some who believe that the Competition Commission may well view it as anti-competitive behaviour and take action against it.)

    Just like with open mandates, MLS estate agents compete with each other to get the first offer that the seller will accept, which is not necessarily the best one.

    It can be very inconvenient dealing with independent requests for house viewings from estate agents you may never have even met. For each one you will have to arrange keys, alarm codes etc.

    If a multi-listing mandate is signed, the listing agent often does not spend too much money marketing your property since there is a chance that the other estate agents might find a buyer first, in which case the listing agent will only get half of the commission. But, as with open mandates, the other agents also aren’t going to exert themselves too much because of the risk that they aren’t first to get a buyer. So what usually happens is that the other estate agents don’t market the property actively but will show a potential buyer the available multi-listed properties if the buyer has no interest in the agents’ own listings.

    Multi-listing mandates might increase the potential exposure that your property gets but, equally, there is far less accountability and more passive marketing than would be the case for a sole mandate.

     

    1. Sole Mandate with an Estate Agent

    This is the best mandate if you have a great agent, and the worst choice if you have a poor agent! Your choice of estate agent is therefore critical.

    This arrangement is the most common in South Africa. A single estate agent is authorised to market your property and, when the property is sold, the agent is paid regardless of who sourced the buyer (although it is usually the agent).

    The estate agent who has the mandate with you may often market your property informally with other agents whom your agent trusts. If one of those estate agents refer a buyer to your agent, then they will usually get a share of the commission from your agent. However, this arrangement is not your concern and you only have to deal with the single estate agent you appointed. Your agent retains control of the selling process and you won’t get calls from other estate agents.

    Strictly speaking, unless the mandate specifically states otherwise, if the seller him- or herself finds a buyer then no commission is payable to the agent. However, normally a sole mandate will include wording (such as “sole selling rights”) to make it “exclusive”, which means that even if the seller finds a buyer then the agent will earn commission. There is often a statement that if the estate agent introduces a buyer during the mandate period, but the buyer only purchases your property after that time, then the agent will still be entitled to commission.

    As the seller it may seem unfair that if you find a buyer yourself then the estate agent will still earn a commission. However, in practice, it is likely that the buyer only found out about the possible sale of your property from the agent’s advertising campaign or the For Sale sign outside your house. If the mandate is not “sole and exclusive”, the estate agent would have to bear the risk that someone sees the advertising and then approaches the seller directly.

    There are thus valid reasons why a “sole and exclusive” mandate is fair to the estate agent. In return, since the seller is “locked in” to using the services of a single agent, that agent must repay the seller’s faith by conducting a effective marketing campaign and finding a buyer.

    It is critical for you, as a seller, to choose only the best estate agent who is great at marketing, client service and negotiating.

     

    Then there is the CommFREE way

    CommFREE offer the Sellers three options. The CommFREE way which gives you the Seller the best services an estate Agent can give, plus the added benefit of saving thousands of Rand in commission. There is no risk of double commissions, all buyers are screened before viewing is allowed (that alone is a big security benefit) the Seller gets full feedback from every potential purchaser, weekly reports, etc. The best available option

    CommFREE also, should the client choose, offer the Seller the option of signing an exclusive mandate with all the terms and conditions stated in a traditional mandate agreement.

    And further, CommFREE have the online marketing option, whereby for a small fee, adverts are placed on behalf of the seller and CommFREE includes an all-inclusive on line advisory service to assist the seller through the whole process of the sale.

     

    Selling Property: Beware the Costs!

    The costs of selling property in South Africa can be significant. Calculate these costs before the decision about selling your property is finalised so you know how much will be left over in your bank account.

    If you are selling property, these are the costs to consider:

    • The estate agent’s commission on the sale of the house (if you are not using the CommFREE). The fee is usually 5 – 8% of the property selling price, plus VAT of 14%. If you are selling property privately then there would be no estate agent’s commission but you would have upfront marketing costs.
    • Costs for electrical, beetle (if you have a coastal property), gas (if relevant) and plumbing (if in Cape Town) compliance certificates. These certificates each cost R600 – R900, but if problems are discovered then you also have to pay for the necessary work to be done before the certificate can be issued.
    • Any bond cancellation fee, if applicable. This is charged by the attorneys if you cancel your bond after selling your property. It is usually about R2000.
    • Early bond cancellation (penalty) fees. If you are intending selling property and cancelling the bond then you should let your bank know in advance, in writing (and continue notifying the bank every 3 months until your property is sold). Otherwise the bank may decide to charge you a fee for cancelling your bond early. This fee is calculated as 3 months’ interest, which can be a substantial sum to pay unnecessarily.
    • Upfront contribution towards municipal rates and taxes (or levies), usually equivalent to about 4 months’ payments, to get a rates and taxes clearance certificate. If your property transfers earlier than this you might get a refund.
    • Capital gains tax if you sell your property at a profit (the first R1 500 000 of the profit made on the sale of a “primary residence” is not taxed if the house was registered in the name of a natural person). The capital gains tax rate usually works out to 10%.

     

    Estate Agency Affairs Board: Code of Conduct
    Estate agents in South Africa have to abide by the Code of Conduct regulated by the Estate Agency Affairs Board (EAAB), in terms of the Estate Agency Affairs Act. Selected relevant extracts of this Code are the following:
    Estate Agents’ General Duty to Protect the Public’s Interest

    In terms of estate agents’ general duty to members of the public and other persons or bodies, an estate agent:

    2.1 shall not … do or omit to do any act which is or may be contrary to the integrity of estate agents in general;

    2.2 shall protect the interests of his client at all times to the best of his ability, with due regard to the interests of all other parties concerned;

    2.3 shall not in his capacity as an estate agent wilfully or negligently fail to perform any work or duties with such degree of care and skill as might reasonably be expected of an estate agent;

    2.4 shall comply with both the Act and the regulations promulgated thereunder;

    2.5 shall not through the medium of a company, close corporation or third party, or by using such company, close corporation or third party as a front or nominee, do anything which would not be permissible for him to do if he were operating as an estate agent;

    2.6 shall not deny equal services to any person for reasons of race, creed, sex, or country of national origin;

    2.7 shall not discriminate against a prospective purchaser of immovable property on the grounds that such purchaser will not, or is unlikely to, make use of financial assistance made available by a specific person or financial institution and which the estate agent offers to arrange on his behalf.

     

    Estate Agent Mandates

    No estate agent shall:

    3.1 offer … any immovable property for sale or to let or negotiate in connection therewith … unless he has been given a mandate to do so by the seller or lessor of the property, or his duly authorised agent;

    3.2 on behalf of a prospective purchaser or lessee, offer … to purchase or lease any immovable property or negotiate in connection therewith or canvass … a seller or lessor therefor, unless he has been given a mandate to do so by such prospective purchaser or lessee;

    3.3 accept a sole mandate, or the extension of the period of an existing sole mandate, unless:

    3.3.1 All the terms of such mandate (or extension, as the case may be) are in writing and signed by the client;

    3.3.2 The expiry date of the mandate (or extension, as the case may be), which shall be expressed as a calendar date, is specifically recorded in the written sole mandate (or extension, as the case may be);

    3.4 accept a sole mandate which contains a provision conferring upon him:

    3.4.1 An option to extend the sole mandate for a certain period after expiry of the sole mandate; or

    3.4.2 A mandate to continue to render the same estate agency service referred to in the sole mandate, after expiry of the sole mandate,

    Unless:

    (a) The client has prior to his signature of the sole mandate expressly consented in a written document executed independently of the said sole mandate, to the inclusion of such provision or provisions (as the case may be); and

    (b) Such document contains an explanation of the reasons for and implications of the inclusion of such provision; and

    (c) Such document is signed by both the client and the estate agent in question;

    3.5 accept a sole mandate which also confers upon him a power of attorney to act on behalf of the person conferring the mandate, unless the intention and effect of such power of attorney is fully explained in the document embodying the sole mandate;

    3.6 include … any clause in a contract of sale or lease of immovable property negotiated by him, whereby a sole mandate is directly or indirectly conferred upon him to sell or let the said immovable property at any time after the conclusion of the said contract;

    3.7 accept any mandate or instructions for work in respect of immovable property if his interest therein would compete with his obligations towards an existing client in respect of the same immovable property without first disclosing such interest in writing to such client;

    3.8 knowingly or negligently make a material misrepresentation concerning the likely market value or rental income of immovable property to a seller or lessor thereof, in order to obtain a mandate in respect of such property;

    3.9 accept a mandate in respect of any immovable property if the performance of the mandate requires specialised skill or knowledge falling outside his field of competence, unless he will in the performance of the mandate be assisted by a person who has the required skill or knowledge and this fact is disclosed in writing to the client;

    3.10 accept a sole mandate to sell or let immovable property, unless he has explained in writing to the client:

    3.10.1 the legal implications should the client during the currency of the sole mandate or thereafter sell or let the property without the assistance of the estate agent, or through the intervention of another estate agent; and

    3.10.2 What specific obligations in respect of the marketing of the property will be assumed by the estate agent in his endeavour to perform the mandate: Provided that such explanations, if contained in a standard pre-printed or typed sole mandate document, shall be in lettering not smaller than that generally used in the remainder of the document.

    Estate Agents’ Duty to Disclose Relevant Facts

    4.1 An estate agent shall:

    4.1.1 Convey to a purchaser or lessee … all facts concerning such property as are … within his personal knowledge and which are or could be material to a prospective purchaser or lessee thereof;

    4.1.2 If he conducts his business in terms of a franchise, disclose clearly and unambiguously in all his correspondence, circulars, advertisements and other written documentation that he operates in terms of a franchise and state thereon his name and the name of the franchisor;

    4.1.3 If he conducts his business under a trade name or style other than his own name, clearly disclose his full name in all correspondence, circulars and other written documentation.

    4.1.4 Not perform … any mandate in respect of a particular property if a current prior mandate, which conflicts with the aforesaid mandate, has been accepted by him, unless he has disclosed to the person who has given the later mandate the existence of such prior mandate, and the fact that he will not be the estate agent’s client in respect of that property.

    4.2 No estate agent shall purchase directly or indirectly for himself, or acquire any interest in, or conclude a lease in respect of, any immovable property in respect of which he has a mandate, without the full knowledge and consent of the person who conferred the mandate, or sell or let his own immovable property or any immovable property in which he has any direct or indirect interest, to any prospective purchaser or lessee who has retained his services, without that purchaser or lessee having full knowledge of his ownership of, or interest in, such immovable property.

     

    Estate Agents’ Duty Not to Make Misrepresentations or False Statements or to Use Harmful Marketing Techniques

    No estate agent shall:

    5.1 in his capacity as an estate agent publish … any advertisement which could create the impression that it was published by the owner, seller or lessor of immovable property, or by a prospective purchaser or lessee of immovable property;

    5.2 wilfully or negligently, in relation to his activities as an estate agent, … make any false statement, whether orally or in writing or sign a false statement in relation thereto knowing it to be false, or knowingly or recklessly prepare or maintain any false books of accounts or other records;

    5.3 claim to be an expert or to have specialised knowledge in respect of any estate agency service if, in fact, he is not such an expert or does not have such special knowledge;

    5.4 advertise or otherwise market immovable property in respect of which has been given a mandate to sell or let, at a price or rental other than that agreed upon with the seller or lessor of the property;

    5.5 Without derogating from the generality of the aforegoing:

    5.5.1 Wilfully or negligently mislead … in regard to any matter pertaining to the immovable property in respect of which he has a mandate;

    5.5.2 use any harmful or misleading marketing technique … to influence any person to confer upon him a mandate to render any estate agency service or to sell, purchase, let or hire immovable property, having regard to the general experience which such person has concerning property transactions and the circumstances surrounding the transaction or proposed transaction;

    5.6 use any firm or trading name in respect of his business if such name may give rise to confusion on the part of the public in respect of the nature of the business carried on by him;

    5.7 inform a seller or purchaser … of immovable property in respect of which he has been given a mandate to sell or purchase, that he has obtained an offer in respect of the property from a purchaser or the seller (as the case may be), unless such offer

    5.7.1 Is in writing; and

    5.7.2 Has been signed by the offeror; and

    5.7.3 Is to the knowledge of the estate agent concerned, a bona fide offer;

    5.8 affix any board or notice to immovable property indicating that such property is for sale or hire or has been sold or let, unless

    5.8.1 The seller or lessor (as the case may be) has given his written consent to do so; and

    5.8.2 The estate agent concerned in fact has a mandate to sell or let the property, or in fact has sold or let the property, as the case may be.

     

    Duties of Estate Agents in respect of Offers and Contracts

    6.1 No estate agent:

    6.1.1 who has a mandate to sell or purchase immovable property shall wilfully fail to present … to the seller or purchaser concerned, any offer to purchase or sell such property, received prior to the conclusion of a contract of sale in respect of such property, unless the seller or purchaser (as the case may be) has instructed him expressly not to present such offer;

    6.1.2 Who has a mandate to sell immovable property, may present competing offers to purchase the property in such a manner as to induce the seller to accept any particular offer without regard to the advantages and/or disadvantages of each offer for the seller;

    6.1.3 Shall amend any provision of a signed offer, prior to rejection thereof, or a written mandate or any contract of sale or lease, without the knowledge and express consent of the offeror or the parties to the contract, as the case may be.

    6.2 An estate agent shall:

    6.2.1 explain to every prospective party to any written offer or contract negotiated or procured by him in his capacity as an estate agent, prior to signature thereof by such party, the meaning and consequences of the material provisions of such offer or contract, or, if he is unable to do so, refer such party to a person who can do so;

    6.2.2 If he knows that an offer submitted by him as an estate agent to any party has been accepted, or has not been accepted by the expiry date thereof, forthwith notify the offeror of such fact;

    6.2.3 without undue delay furnish every contracting party with a copy of an agreement of sale, lease, option or mandate with which he is concerned as an estate agent, provided that the aforegoing shall also apply in respect of an offer to purchase or lease if the offeror specifically requests a copy thereof.

     

    Prohibition Against Undue Influence by Estate Agents

    No estate agent shall without good and sufficient cause… influence any party … to a pending or a completed transaction to utilise or refrain from utilising:

    7.1 The services of any particular attorney, conveyancer or firm of attorneys;

    7.2 The services or financial assistance offered by any financial institution to members of the public in general; or

    7.3 The financial assistance offered to such party by any person.

     

    Remuneration of Estate Agents

    No estate agent shall:

    8.1 … receive … any … commission … arising from … any … contract of sale or lease which is subject to:

    8.1.1 A suspensive condition, until such time as that condition has been fulfilled; or

    8.1.2 A resolutive condition, during the time that the transaction may fall away as a result of the operation of the said resolutive condition:

    Provided that the aforegoing shall not apply if

    (a) Good cause exists; and

    (b) the party liable for the payment of the … commission … has expressly consented in a written document executed independently of the contract in question, to such payment at any time, notwithstanding the fact that the said contract is subject to a suspensive or resolutive condition, as the case may be; and

    (c) Such document contains an explanation of the implications and financial risks for such party of such payment; and

    (d) Such document is signed by such party and the estate agent in question;

    8.2 convey to his client or any other party to a … transaction in which he acted or acts as an estate agent, that he is precluded by law from charging less than a particular commission or fee, or that such commission or fee is prescribed by law, the board or any institute or association of estate agents or any other body;

    8.3 introduce a prospective purchaser or lessee to any immovable property or to the seller or lessor thereof, if he knows, or has reason to believe, that such person has already been introduced to such property or the seller or lessor thereof by another estate agent and that there is a likelihood that his client may have to pay commission to such other, or to more than one, estate agent should the sale or lease be concluded through his intervention: Provided that the aforegoing shall not apply if the estate agent has informed his client of such likelihood and obtained his written consent to introduce such party to the property or the seller or lessor thereof;

    8.4 include … any clause in a mandate or in a contract of sale or lease of immovable property, providing for payment to him by the seller or lessor of immovable property, of any … commission … arising from … a contract of sale or lease, regardless of the fact whether the purchaser or lessee is financially able to fulfill his obligations in terms of the said contract:

    Provided that the aforegoing shall not apply if

    (a) Good cause exists; and

    (b) the seller or lessor has, prior to his signature of the contract or mandate (as the case may be) consented in writing in a document executed independently of the said mandate and contract, to such payment; and

    (c) Such document contains an explanation of the implications and financial risks for the seller or lessor of such payment; and

    (d) Such document is signed by both the estate agent and the seller or lessor;

    8.5 include … any clause in a contract of sale or lease of immovable property negotiated by him, entitling him to deduct from any money entrusted to him in terms of the contract, any … commission … arising from … such contract: Provided that the aforegoing shall not be so construed so as to prohibit an estate agent from making such deduction when such money is actually paid over by him to the party entitled thereto and such party is in terms of the said contract liable for the payment of such … commission …

    Trust Money and Interest

    An estate agent:

    9.1 shall not solicit or influence any person entitled to trust funds in the agent’s possession or under his control to make over or pay to the estate agent directly or indirectly any interest on monies deposited or invested in terms of section 32(1) or 32(2)(a) of the Estate Agency Affairs Act;

    9.2 shall, before he receives any money in trust in respect of a contract of sale or lease, disclose to the parties concerned that unless they agree in writing to whom interest earned on such money must be paid, the interest shall, in terms of section 32(2)(c) of the Estate Agency Affairs Act, accrue to the Estate Agency Affairs Fidelity Fund; .

    9.3 shall, if any money is invested by him pursuant to section 32(2)(a) of the Act or pursuant to an instruction by the party entitled to the interest on money held in trust by the estate agent:

    9.3.1 invest such money at the best interest rate available in the circumstances at the bank … where he normally keeps his trust account or accounts, and

    9.3.2 Pay the full amount of the interest which accrued on the investment to the party entitled to such interest, or the Estate Agency Affairs Board, as the case may be, subject to any written agreement in this regard between him and such party;

    9.4 shall not include … any clause in a contract of sale of immovable property negotiated by him, providing for payment to the seller, prior to registration of transfer of the property in the purchaser’s name, of any portion of the purchase price entrusted to the estate agent by the purchaser: Provided that the aforegoing shall not apply if

    (a) Good cause exists; and

    (b) the purchaser has prior to his signature of the contract in question, consented in writing in a document executed independently of the said contract, to such payment; and

    (c) Such document contains an explanation of the implications and financial risks of such payment for the purchaser; and

    (d) Such document is signed by both the seller and the purchaser and the estate agent in question.

    Confidentiality by Estate Agent

    No estate agent shall, without just cause, divulge to any third party any confidential information obtained by him concerning the business affairs, trade secrets or technical methods or processes of a client or any party to a transaction in respect of which he acted as an estate agent.

    The full text of the Estate Agency Affairs Board’s Code of Conduct can be downloaded at the board’s website

     

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