Using an estate agent

How can an estate agent assist me?

Your search for a new home can be made much easier if you use the services of an estate agent. Agents make it their business to provide every service connected with your search for a home – from expert advice in the early stages, to careful monitoring of taking transfer of your home. The more closely you work with one agent, the better your needs become known and the more effectively they can help you, saving you time and possible trouble. All agents are bound by law to deal fairly and ethically with both the buyer and the seller. Because the seller typically mandates the agent, the agent is legally obliged to represent the seller’s interests. This means you must decide what offer to make and what counter-offers to accept. Don’t make or accept an offer that you are not completely comfortable with.

What are the benefits of using an estate agent?

The agent can help you to set up a plan of action through an analysis of your needs and finances, the current housing market and homes available in your price range. The agent personally conducts your search to find neighbourhoods and homes that fit your requirements. The agent can guide you through making an offer on a home and presenting it to the seller.

What is the role of the estate agent?

The estate agent is the link between the buyer and the seller. The agent will negotiate an agreement of sale acceptable to both parties. An offer to purchase is drafted by the estate agent. This must be signed by the agent, the buyer and the seller. Once signed it becomes a legal binding contract of sale. A copy of this document must be attached to the loan application form. For this service, the estate agent charges a fee or commission paid by the seller.

Ten questions for your attorney

1. To whom do I pay the Deposit?

This will depend on what your contract says. Your deposit can be paid either to the estate agency or the conveyancers appointed to handle the transfer. They both have trust accounts where your money is protected. Please ensure you receive the appropriate receipts. Don’t pay your deposit directly to the seller or to an estate agent, as opposed to the estate agency company.

2. Who gets the interest on the Deposit?

Unless otherwise agreed, the interest is paid to you after registration of transfer. On your written authority, both your estate agent and conveyancer can arrange for it to be invested in an interest-bearing account, and will act in your interests by placing it in the best short-term investment available.

3. To whom do I pay the Occupational Rental?

Your occupational rent goes to the estate agent or the conveyancer. They will usually pay it into the seller’s bond account or directly to the seller, if he has paid off enough of his bond account. You could pay it directly into the seller’s bond account if so agreed, but you may be required to provide proof of payment each month.

4. When will I have to sign the Transfer Documents?

This may only be a few weeks after the sale agreement is signed. Usually your conveyancer will wait until the bond is granted and he has received the cancellation figures for the seller’s existing bond. Only then can the guarantee authority forms be completed and signed. You can phone the conveyancer for an update at any time

5. How long will the transfer take to register?

This depends on the circumstances and due dates for the bond grant, and on the guarantees stipulated in the deed of sale. The average for most sales is about three months from the date of sale. When there are no complications, registration can be effected within two months. In cases where there are complications, registration can be delayed. In such cases, you will need to stay in touch with your conveyancer.

6. What will my transfer and bond costs be?

Your estate agent and attorney should be able to answer this question based on a schedule of transfer and bond costs. The actual transfer fees depend on the purchase price of the property. Bond costs depend on the total loan registered – and whether you are buying in your own name or in a trust, close corporation or company. Our fee calculator will give you a clear indication of the costs involved.

7. When must my transfer costs be paid?

This usually happens a few weeks after the sale, when you sign your documents. Your conveyancer will require payment, since he has to pay the transfer duty – the major charge on most transfers – in advance, as well as the rates or levies due to obtain a clearance certificate. Don’t delay making a payment – it will unnecessarily delay the transfer.

8. Who will register the transfer bonds?

The bank will have a local panel of conveyancers for bonds, and one of these will be instructed to register your bond. If the transfer conveyancer is one of those on the panel, he will probably do the bond registration as well. The bond costs will be the same, though your transfer may go through faster if the same conveyancer does both.

9. Who will contact me on registration?

Your conveyancer’s secretary should contact you on registration to advise you. You will also be given a final statement of the account. Your estate agent may also phone you to confirm registration. The bank will send you a letter advising you of the registration of your bond, and the date when your first instalment is payable.

10. Where will I get the keys to the property?

It is best to make an arrangement with your estate agent to pick up the keys from them on the agreed day of occupation.

Interest on your home loan

The interest rate the bank charges is determined by a number of factors.  The interest rate will reflect the risk the bank perceives with the transaction.  The amount of the loan, your personal financial record, your income and repayment, and perhaps most importantly, the deposit you have available, will determine the rate engaged.  Given the competitive nature of the home loan market, significant differences in rate are unusual but if you approach only a single bank, you may not receive your best rate. While the rate of interest is an important consideration, one cannot lose sight of other considerations when deciding on where to place your home loan business.  The savings possible through use of an access facility could easily outweigh a small rate premium.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za

Prospective property sellers and buyers are warned to be careful when dealing with several estate agents who are marketing the same property.

Sellers need to be aware of certain risks or they could end up paying double commission, says Gerhard van der Linde, principal of Seeff Pretoria East.

Van der Linde quotes a recent Supreme Court of Appeal ruling that emphasised that buyers and sellers need to be aware that they could be liable for unexpected estate agent commission claims on property sales.

“The court upheld an appeal against a KwaZulu-Natal High Court decision where an estate agency that had introduced a buyer to a home was not entitled to the agent’s commission.”

He explains that an agent from another company had learnt the buyer was interested in the property.

She contacted them when she discovered the seller was willing to reduce the price, the sale was concluded and she was subsequently awarded the sale’s commission.

Although the first agency had no mandate to sell the house, the Supreme Court appeal overturned the decision indicating the agency had taken the buyer and her husband to the property.

If that agent had not introduced them to the property, the couple would not have known the property was on the market. The first agent was thus the effective cause of the sale and entitled to the commission.

The court stated it was notoriously difficult where there were competing agents, to determine who was the effective cause and that it may be that more than one agent was entitled to the commission. Sellers could then find themselves liable to pay commission to two agents.

“A seller appoints an agent usually under a written mandate to find a willing and able purchaser in exchange for an agreed commission,” says Van der Linde.

If there is no mandate and several agents from different companies are involved, the eventual sale agreement could contain a warranty by the purchaser that they had not been initially introduced to the property by another agent thus providing indemnity to the seller should another agent successfully claim commission, he says.

It is absolutely essential that buyers and sellers are aware of this possibility, he points out.

“Always clarify this situation with your agent/s and make sure that you are not unwittingly going to end up paying a double commission.”

He adds that a sole mandate is preferable as it protects all concerned and the mandate can be drawn up for any period of time that the seller feels will be suitable.

Please contact us if you require any further information or would like to apply for finance:

Complete this short form online

011.327.4489 / 0861 1111 93

morne@mortgagepluscc.co.za

www.mortgagepluscc.co.za