The role of an Estate Agent in a Property Transaction
In previous blogs we took a look at Conveyancing and some views on the positive association between originators and banks. We have also posited some tips regarding investment properties for those who would like to invest in property.
In this blog, I would like to share some of my experiences with estate agents.
We have all heard horror stories of “my estate agent!”. They are “this and that” and “why couldn’t they…”. To be honest, I have never had that experience in the sale of a number of properties with different estate agents and companies. I have many good friends who are estate agents and serve on a board of directors with outstanding men and women of high skill and integrity.
In short and upfront in this article, if you don’t like your estate agent [personality clashes and misunderstandings do occur] then call the Principal of the estate agency and change the person to someone with whom you would like to work. But, also understand some of things.
An estate agent does not work for you but for the Seller. They receive a mandate, virtually always in writing and sole- or joint-, to sell a particular property for the seller. They are to have the seller’s best interest at heart and present to the seller best offers that come from their marketing efforts. They are not at liberty to alter amounts or clauses without the written approval of the seller. Therefore nothing you say or write, is accepted until presented to the seller for signature approval or counter-offer by the seller. The estate agent is duty bound to achieve the best terms of price and conditions for the seller.
Does all of this mean that the estate agent is never for the buyer? No, not at all; they are professionals quite capable of seeing both sides of a sale. However, do not assume that the estate agent is working for you, the buyer, when presenting the offer. Be careful to be explicit in what you communicate and when conditions are written into a contract, understand the implication for you. Do not hesitate to obtain legal advice if you feel it is that serious that you need professional assistance. Trust is always essential in these relationships so work with someone you feel you can trust and then be wise in your dealings.
With this background, when buying a property
- Be very clear on what you can afford, what deposit you have and what bond you can apply for. ( have a look at our affordability calculator if you are unsure about this)
- Be very clear on what your minimum requirements are and, then, what you would like to have. For instance, understand the need for a study versus a family room and which one you would prefer if a house you can afford does not have both. And then, always leave room for debate and changes of mind – buying a home is stressful fun!
Once you have these matters clearly in your mind, approach a reputable estate agent in the area you wish to buy and brief him or her on your affordability and requirements.
You can see from this that your clarity, what I would call your Buyer’s mandate to the estate agent, is very important. You are not buying a couch here, this is probably your biggest investment apart from your pension, that you will ever make. On the other hand, you cannot expect a professional estate agent to bumble around with you on what you can afford or what you want.
An estate agent is trained and qualified theoretically and practically to:
- Contract with seller who wish to sell their home. They receive a mandate from these sellers for many things, obviously, including the desired sale price. They probably also understand the negotiability of a price by the seller.
- Understand the values of properties in an area and the comparisons between the prices of different houses. They may, for instance, advise a seller to paint and repair their house in order to assure a requested sale price knowing that houses in the area that have fetched a price have done so on the back of being clean and well-maintained.
- Undertake a market analysis for the seller on which a future buyer can depend. For instance, what are the average selling prices over the last 6 months, what are the lowest and highest prices etc?
- Administer the sale and purchase of the property for the seller and buyer in their best interests.
- Negotiate the transaction between the seller and the buyer.
As regards latent defects, remember the estate agent is not supposed to know about them. After all, they would not be “latent” if any reasonable person could see them. What the estate agent must do is ask the seller if they know of any latent defects and, once revealed, must declare these to the buyer. Of course, you as the buyer may request a home inspection report [there is a good chance of these becoming regulated like an electrical compliance certificate] as one of your conditions of purchase. The same goes for roads and infrastructure where your local municipality could help you understand routes and the likelihood of occurring.
There is a role that is often not discussed and that is inter-personal relationships. Estate agents need to be fair and confident but always display sensitivity to the parties. Think of it this way, an elderly couple is selling their family home to retire and a young couple is buying their first home. The seller is reticent, nervous, sad, pondering the future and has brought their children along to advise and help them whilst the buyer is young, energetic, internet-savvy, aspirational, unexperienced and stretching their budget. The estate agent has the wonderful job of bringing these two parties together from mandate to transfer and making the experience of both memorable and enjoyable. Just think of the interpersonal skills that an estate agent needs to reflect in this scenario. And most of them are really good at what they do – I have never had a bad experience.
There are many twists and turns in property transactions. This blog is not a manual, but rather just a heads-up for us to gain insight into the various role players and the relationships between them. Homeloan Junction hopes it informs you a little more and helps make your experience a good one.
- VITAL SIGNS - January 18, 2021
- ODIOUS COMPARISONS [Part 2] - December 24, 2020
- ODIOUS COMPARISONS [Part 1] - December 24, 2020
