How Real Estate Agents Can List For Sale by Owner Properties (FSBOs)

Listing a property that is currently for sale by the owner can be a tough task. Most owners will hold out for awhile before they will consider listing their house with a real estate agent. The plus side here is that you know they are motivated to sell. So if they do choose to list their home with a real estate agent, how can you make sure that you are they real estate agent they choose?

You will first need some addresses of FSBO’s to mail to. It is possible to buy lists, but the best leads seem to come from the houses you end up driving by and marking down the address. Just get all the members of your team to keep a look out for FSBO signs, and mark the address down for you.

I have always been a fan of hands off marketing campaigns that don’t take up too much time once they are set up. This campaign has been set up that way. First, you will need to create a series of six postcards. The first to will have tips for selling your house. The second two will talk about some sort of advance marketing that you do. It should sound impressive, like something they can’t do on their own. The third two should talk about your listing guarantees. Other than paying a commission, the second most common objection is getting locked in to a long contract. So why not offer an easy cancel guarantee? You may want to also offer a communication guarantee to assure them that they will not be left in the dark.

Send the first three postcards every third day. Send the last three postcards spaced a week apart.

If you are getting enough leads this way, and business is booming, leave the campaign where it’s at. If you could still use more leads, then after postcard number four goes out, make a personal visit to the house to see if they could use any help or if they have any questions. You may want to ask if you can stop back in a week or two to see how things are going.

Most agents don’t market this consistently to FSBO’s, and if your postcards look professional and memorable, you should be the first real estate agent that comes to their mind when its time to list.

Top Advantages of Using Good Letting Agents

From marketing the property, carrying out inspection, collecting rent to taking care of legal requirements, a specialised agency does everything to save the time and energy of the landlord. Have a look at the top benefits of using the letting service agencies to manage your valuable property:

Take care of all legal requirements and changes

As a landlord there are certain legal requirements that you have to fulfil. The legal requirements frequently changes, so you have to be well aware of the changes to adhere to them. A good letting agency or agent knows legal requirements better than you and always ensures that your property adheres to them. From getting a gas certificate to obtaining an energy performance certificate (EPC), a professional agent does everything to reduce the burden off your shoulders.

Finding suitable renter for your property

The most important job of a good letting agency is to help the owner to find a good tenant. If you have some specific requirements when it comes to tenants like non smokers, students or bachelors, the letting agency is the best one to find you suitable renters for your property. A good agency carefully carries out reference checks and background enquiry of the prospective tenants. With an expert agency on board, you can be assured that the tenants will take good care of your property and pay the rent on time.

Takes care of small repairs and maintenance

A good letting agency has a large network of electricians, plumbers, gardeners, and builders etc. who can fix problems quickly and at a reasonable price. Depending on your agreement with the company, the maintenance charges can be added to the monthly letting agency fees. Professional letting agents will also carry out frequent inspections to ensure that the renter is looking after your property well. With a letting agency at your service, there would be no middle of the night phone calls from your renters!

Property is rented quickly

With a letting agency at your service, you will be able to attract the attention of potential tenants more quickly. The firm can advertise your property to as many as potential renters, through online websites, local news papers, social media etc. The letting agencies also use social media sites like Facebook to market your asset. They know how to click good photos of your property and use them effectively on websites to attract more renters.

With a reputed letting agent at your service, you don’t need to worry at all about your property because it’s all being taken care of by the professionals. So, if you have a property and you are worried about its managements, now it’s time that you shun off all your worries and hire skilled and experienced professionals to shoulder down the responsibility of all your property managements related tasks.

Selling Your House: How Many Estate Agents Do You Need?

A few years back we decided to sell our house and move on to a new area.

One of the first things we did was put a signboard on our window with our telephone number on it so that anyone interested could call us and we could show them the house.

The result was terrible. Estate agents kept on calling saying that they had clients for our house. First you think ‘hey, that is pretty cool’ so the estate agents came to our house by the dozen taking photos and measuring the rooms. We thought we had the house sold.

Months passed and every week one or two newly established estate agents would come to our house and do the same thing. What was funny is that none of them ever came with any clients.

So we thought that maybe the house was too expensive, so we dropped the price and actually spent our time and money calling all these Agents telling them about the price change.

Then we did get clients through them, but I will never understand why we got the same clients through various Estate Agents. If they had already seen the house then why come with another Agent to see it again?

Well it seems this is pretty the norm. They see the house with one and then visit another because they know the Estate Agents usually have the same houses for sale and see it again and try to renegotiate the price.

Why do Estate Agents allow this? Every time we negotiated the price because the Estate Agent said that someone who saw our house wanted to buy it, instead of selling it, we would see the same clients with another Estate Agent. So all that was happening is that we were negotiating with one Agent the price that had already been negotiated with another Agent and they were from different companies.

My advice to anyone selling their house is find an established agent and stick to him. Putting the house for sale in a lot of agents will only gave us headaches and if you do sell the house be prepared to sell it for much less than what you initially asked for.

Are Real Estate Agents Due Commission

The right of an Estate Agent to earn commission is enshrined in common law. In general, commission is due when the Estate Agent has perform a client’s mandate, regardless of the amount of time or effort it took to perform the mandate.

In South Africa, there is no limit to the amount of commission an Estate Agent can charge. In the upper end of the market, this often results in impressive earnings. These facts, combined with the public perception that an Estate Agent is often seen to do very little in comparison with the handsome rewards received, has encouraged many people to join the Estate Agency industry. At last count there were more than 72,000 Estate Agents registered in South Africa. Although, in practise, not all are actively working as Estate Agents. Many Estate Agents are active only when the property market is buoyant and go dormant when the market slows down. Nevertheless, they are qualified to act as Estate Agents and may resume activity whenever they feel, with the provision that they comply with the requirements of the Estate Agencies Affairs Act.

Giving rise to commission dispute

Before we go on, it should be noted that most property deals go through without dispute. However, this does not mean that of the deals that go through there was no reason for dispute. Simply not knowing is often a cause for valid claims not being made, mostly on the side of the client. For such cases there is nothing one can do in retrospect, since all wrongs committed by Estate Agents are automatically made right upon date of transfer. No need to repent or visit confession, all sins are just magically wiped away.

In most cases commission disputes arise simply as a result of misconception by the public as to their rights and duties when they give an Estate Agent a mandate. However, dispute also arises due to misconception of Estate Agents as to their rights and duties in performing a client’s mandate. Both types of misconception can be easily avoided if Estate Agents spend more time being “frank” about discussing commission before accepting a mandate. In practise, this does not always happen, whether because of forgetfulness, lack of diligence or because of pressure to get the mandate. Discussion surrounding commission is often relegated to a mandate form, placed in front of the client with the expectation of signing. This document merely serves to capture the basic details and rarely elaborates on definition of terms, rights or duties at length.

While it is sound business practise to record in writing the amount of commission and under what circumstances the mandate will be considered fulfilled, some mandates omit small points that are not in the Estate Agency favour or the document itself serves to cover “conditions of absence in agreement” covered by common law. For example, under common law, in the absence of an agreement to the contrary, an Estate Agent is not entitled to commission simply because, over a period of time, there has been a conscientious effort to carry out a clients mandate.

Compliance requirements

We have noted that certain common law principles govern an Estate Agent’s right to commission and that standard contracts are employed to cover such rights. We have also noted that such documents can fail to explain terms and can even be employed to protect the agent from common law principles that are not in the Estate Agents favor. Our remedy to reducing the potential for conflict is to encourage more open discussion and consultation of commission with clients by Estate Agents.

However, assuming such discussion were to take place, how is a person know whether or not an Estate Agent is due commission when they themselves do not have enough information to ask the right questions during such discussion.

In this section we cover some of the points clients should know, compliance points that are often neglected or forgotten by even the most seasoned and professional of Estate Agents.

The first thing to know is that the Estate Agency Affairs Act and the Code of Conduct both have a direct impact on an Estate Agents right to receive commission. One of the most important stipulations of the act is that an Estate Agent may only receive commissions on transactions concluded during a period for which the Estate Agent is in possession of a valid Fidelity Fund Certificate.

Second thing to know is that Estate Agents who have not complied with the prescribed training requirements are not allowed to receive commission on agreements where they have drafted or completed clauses in a sale or lease agreement.

In addition to these requirements section 8 of the [Code of Conduct] sets forth conditions under an Estate Agent shall not be entitled to commission.

The implications of these three points are often not made clear to clients. Rarely, if ever, is a client furbished with a copy, or presented, an Estate Agents Fidelity Fund Certificate or a copy of the Code of Conduct. Incidentally, the Fidelity Fund Certificate is printed with a business card sized tear-off capable of fitting into a wallet where it can be easily kept like a drivers license and presented when required. There should be no reason why a professional Estate Agent with a valid Fidelity Fund Certificate should not wish to present it.

The act goes one step further. In addition to an individual Estate Agent having to hold a valid Fidelity Fund Certificate, the Agency Company, all participating directors and any person promoting or canvasing immovable property are also required to hold a valid Fidelity Fund Certificates. In the event that an Agency does not have valid Fidelity Fund Certificate, or any of the Estate Agents or employees of the Agency, all people employed with such agency are not entitled to claim commission.

In an industry with more than 72,000 agents, the public can easily be convinced to mandate the services of non-valid Estate Agents. Such persons, while operating illegally are not bound to operate under the Estate Agency Affairs Act or the Code of Conduct. As a result the Estate Agency Affairs Board, the organisation responsible for protecting the consumer, can only bring a criminal case against such persons and has no power to sanction any conduct. Whereas, if the Estate Agent is operating with a valid Fidelity Fund Certificate, failure to comply with requirements constitutes conduct deserving of sanction that may see the Estate Agents license to operate revoked.

Performance of the mandate

Terms of mandate differ, but in general terms a mandate is seen to be fulfilled when:

1. A buyer is introduced to the seller who is both legally and financially able to buy the property.

2. A binding contract of sale is concluded. It is worth noting that a contract with suspensive conditions is not binding until such time as such conditions have been met.

3. A transaction and its terms are substantially in accordance with the clients mandate.

Point 3 is interesting. The word “substantially” gives rise to a special twist. Since it means that, unless a client makes express note that commission will only be paid when the contract is concluded on “exact terms stipulated”, an agent is not required to execute a mandate to the exact letter. For example, if the client wants 500, 000 for a property and the highest offer attainable is 450, 000, the client cannot refuse to pay the full commission agreed.

A further twist of this case can evolve where an introduced buyer does not enter into a sale, but instead enters into a lease agreement. In this case, despite a lease agreement being in place, the Estate Agent is not deemed to have substantively completed the mandate and is not due commission as a different transaction to that which was mandated has resulted.

In practice we see this problem occurring all the time. An Estate Agent concludes a contract of sale at a price less that what the buyer was prepared to accept. Then the seller wishes to negotiate the commission down.

Effective Cause

Many people are under the impression that all they need do to qualify for commission is introduce a buyer and seller from wish a contract of sale is concluded. This is possibly one of the most common misconceptions shared by both Estate Agents and clients alike.

In fact an Estate Agent is required to do the above and be capable of demonstrating that he or she was the effective cause of the resulting transaction, north withstanding other factors. In reality many factors must be considered in order to demonstrate effective cause, including:

* How much effort did an agent put in. Simply giving a buyer and seller each others telephone numbers is not enough.

* The time between introduction and sale. If buyer and seller conclude a sale shortly after introduction, the argument that the Estate Agent was the effective cause is strong. However, if the sale agreement took place after a considerable period of time, the argument would be more difficult to prove.

* The extent of consultation provided by the estate agent. If through an Estate Agents consultation one or more obstacles to conclusion of the sale where removed, then the effective cause is in favor of the Estate Agent. However, if the obstacles were removed without the help of the Estate Agent, then the effective cause is most probable to lay with the buyer and seller.

* Frequency of interaction. How often did the Estate Agent communicate with the buyer and did the agent cease negotiations with the buyer at any point in time.

Conclusion

This article has briefly highlight a few of the main points concerning the rights and duties of Estate Agents and clients using their services. While some may see the information provided as a means to try avoid paying Estate Agents commission, the ability to do so legally is not easy. However, clients that feel they have genuinely not been served by an Estate Agent are not without recourse, if they have the information pertaining to their rights and duties as clients.

Having said this, it should be noted that Estate Agents are not paid for good intentions or hard work, only for bottom-line results. As a result it is not possible to measure an Estate Agents performance by the amount of work they put into a deal. Many Estate Agents do put a tremendous amount of work into their deals and take great pride in adhering to professional conduct. By the same token, an Estate Agent can earn considerable amounts of commission for relatively little work, but in this case runs the risk of getting nothing whatsoever if the mandate is neglected.

In closing it could be argued that the expectations and needs of clients would be better served if clients were better informed about both their own rights and duties and those of Estate Agents. However, in order for service levels to be improved, clients must also be willing to enforce their rights and not accept invalid Estate Agents or negligent service.

Real Estate Agents and Roles of an Agency

Agency is a relationship existing between two parties called principal and agent, and in the case of property, a Jamaica real estate agent has the function to create a contractual relationship between the principal and third parties.

The Creation of Agency

The power of the Jamaica property agent to act may arise in any one of five ways:

1. Express Authority

2, Apparent Authority

3. Ratification

4. Necessity

S. Presumption of wife in the case of cohabitation.

1. Express Authority

The express authority for an agent to act on behalf of a principal (otherwise called the vendor) can be made either in writing or orally. No formality is required except where the agent is appointed to execute a deed; his authority must be by way of a deed. That is, he is to be given a Power of Attorney. While being trained Jamaica realtors are sensitized of this in a special apartment guide for Jamaica.

2. Apparent Authority

This arises where the principal represents to a third party that the agent is authorized to act on his behalf, intending that the representation be acted upon and is acted upon by the third party. The principal is bound by the agreement entered into by the agent. This is common place for most Jamaica home rentals.

3. Ratification

Where the agent has no authority to contract on behalf of the principal or exceeds such authority the contract is not binding on the principal. The principal may however afterward confirm and adopt the contract so made. This is known as ratification.

For Ratification to take place the following conditions must be present:

a) The agent must have contracted expressly as agent for a named principal.

b) The principal must have been in actual existence at the time of making the contract. He cannot there pore bind a company which was not formed at the time of making the contract,

c) The contract should be capable of ratification. Thus a void contract cannot be ratified.

d) The principal must at the time of the ratification have full knowledge of the material facts.

e) Ratification must be of the whole contract.

Ratification is retrospective in its operation, that is, the parties are put in the position they would have been in if the agent had when the contract was made, the authority he purported to have had. This is possibly the most fundamental with respect to knowledge of the Jamaica real estate market. Most investors are made aware of ratification in a guide to investing in Jamaica property.

4. Agency of Necessity

This arises by operation of law and occurs where one person is entrusted with another’s property and due to some emergency it becomes necessary to do something to preserve that property. Although the person entrusted with the property has no express authority to do the act necessary to preserve it, because of the necessity, the authority is presumed.

Before the Agency of Necessity arises three conditions must be satisfied;

a) It must be impossible to get the principals’ instructions.

b) As a necessity, commercial value must be the catalyst for the creation of the agency

c) The agent of necessity must act in the interests of all parties concerned.

5. Agency of Cohabitation

At common law where a husband and wife are living together, the wife is presumed to have her husband’s authority to pledge his credit for necessaries judged according to his style and standard of living. Though not a legal representation of the principal, this happens more often than not in the divestment of Jamaica homes for sale.

The presumption of Agency arises from cohabitation and not from marriage. It has been held to apply equally in the case of a woman living with a man as his mistress; the presumption can be rebutted if the husband proves:

a) he expressly forbade his wife to pledge his credit;

b) he expressly warned the supplier not to supply his wife with goods on credit:

c) his wife was already sufficiently supplied with goods of the kind in question;

d) his wife was supplied with a sufficient allowance or sufficient means for the purpose of buying such as goods without pledging the husbands credit,

e) The order though for necessaries, was excessive in extent or having regard to the husband’s income, extravagant.

Where the husband has been in the habit of paying his wife’s bill with a particular supplier, his wife’s agency will be presumed and he can only escape liability by expressly informing the supplier that his wife’s authority is revoked.