TODAY, I put pen to paper in an attempt to begin to address the important role of the real estate agent.
Regardless of the importance of the real estate industry to our development, I am not aware that any provision has been made to discuss this topic in our schools or institutions.
However, there are a number of certification courses available internationally to ensure that people are trained in the fundamental procedures and practices and operate uniformly, according to a designated code of conduct. I would add that, in some countries, all sales and rentals are handled through an agent.
In the case of sales, agents often alternate between acting for the vendor, as listing agent, or acting for the purchaser, as buyer agent. I must hasten to add that in our region, we find many people operating as dual agents, that is, acting for both parties. They list a property and find a buyer or tenant. Any other agent who may offer a buyer or tenant becomes a referral agent, and compensated accordingly. Of course, this is determined by other factors in the chain where there may be a broker, who works with agents or engage referral agents.
In order to keep it simple, such discourse would be for a later episode where commission splits are detailed.
The principle is that for every sale or rental, there are only two major players, namely the vendor and purchaser or the landlord and tenant. Anyone in between is the facilitator! In context of our topic, the facilitator is the principal agent. We, therefore, must emphasize on the role of that agent.
Functions of the Listing Agent:
1. The main function of this principal agent is to become acquainted with the details of the property, starting with location, including boundaries, restrictions, covenants, zoning uses, topography, view, utilities, water storage, neighbourhood, public/private access, etc., and to enter into a signed listing agreement.
2. A vital function of the agent is firstly to give initial advice or suggestions to owners in providing a more desirable and functional product. This must not be underestimated as often agents could use their experience to suggest reasonable asking prices based on present-day available comparables.
The point is that an agent MUST be able to confidently market a property knowing that, all things considered, the price can be substantiated and not be an unnecessary deterrent.
3. Of course, where sales are concerned, an up-to-date market valuation by a qualified valuer is vital, as required by the bankers or financers. In listing a property, the onus is also on the agent to calculate and advise the vendor of the applicable taxes and fees to be deducted so as to avoid issues down the road. The asking price, and the lowest acceptable price, can then be arrived at.
It should be mentioned here that the agent should ensure that ALL legal owners sign the listing agreement, especially when for sale.
4. The agreement would indicate exactly what is to be marketed, where situated, at what asking price, (negotiable option) as of a starting and expiry date, and all features of the property, (inventory list attached, if necessary). An important element is the rate or agent fee to be paid.
5. Generally, an agreement may authorize the agent to share listing with other agents. This would allow other agents to participate in marketing initiatives, exposure, accelerate results, and share the fees.
Documentation, as always, is at the forefront of every step. Along with the listing agreement, the supporting legal documents of the deed of sale, copy of the land register, survey plan, etc. are required, for specific purposes. Vendors and purchasers must now obtain clearances from the Income Tax and Property Tax departments, as well as the National Insurance Company.
6. The agent, within world environments, and more specifically in our local communities, is also charged with the vetting of all clients by asking the right questions and employing simple due diligence. This prevents problems in the long-run.
Though the initial functions of an agent may expire, based on whether for sale or rental, the agent may continue to have responsibility for a period of time. This discussion would be handled under the topic of property management.
Finding a Buyer or Tenant
An agent would normally use various means of advertising, but it must be mentioned that those options would be stated in the agreement, as many owners simply do not want a “For Sale” sign placed in front of their property. In Canada, I notice that where a sign is placed, the owners or tenants actually give their agent’s information to people who want to view.
It’s important to stress that everyone’s time is precious, that the salient questions are asked, and a “request” form is completed prior to setting an appointment to show properties. That way, both parties are reasonably confident that the other is prepared and not simply going for a ride.
Due diligence must be employed so as to have a record of what is shown and who is entering a person’s property for viewing purposes.
When a person expresses willingness to take a property, there are essential steps to be taken, followed by relevant documentation.
Any holding deposit for a sale, or a security deposit for a rental, must be accompanied by a receipt. This must also follow important guidelines as to the specific property and on whose behalf.
Often, it requires a number of visits to a property, especially with other family members, or service providers, before a firm decision can be made.
Where there are absent owners, as living overseas, it is necessary, especially for rentals, to have a designated property manager, who is able to act for the owners.
The property manager, who could also be the principal agent, would have additional responsibilities for the property; for example, the collection of rents, and oversight of grounds, utilities, repairs, which continue until cancelled by either party.
It must be added that proper arrangements must be sought by an agent who wants to show a building or apartments for sale or rental. These arrangements should be enshrined in any rental agreement and would only be conducted in the daytime upon due notice to occupants.
Some owners would give a power of attorney to an individual who would sign over a sale property on their behalf, but subject to strict instructions.
The foregoing just scratches the surface until next time.
(Contact Karleen Greenidge at 460 4568)