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Questions You Need To Get Answers From Your Estate Agent On - Before You Sign The Sole Mandate

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Questions You Need To Get Answers From Your Estate Agent On - Before You Sign The Sole Mandate

With the appointment of an estate agent, sellers need to ensure that their contracted property practitioner will be the best equipped person to assist them on a potential emotionally draining transaction which has a big impact on their financial well-being. 
 
Property sellers are rarely property market specialist as they only sell a property about every 9 years. They therefor need to find a real estate professional who they can trust to look after their best interests, and who will be best equipped and experienced enough to sell their home for its full market value. 
 
Here are some questions to ask your property practitioner in your first interview:
 

1. About the agent and his or her marketing plan:

1.1 Confirm that they have a valid Fidelity Fund Certificate (FFC) - check for the current calendar year on the FFC and double-check its validity on the PPRA website (www.theppra.org.za).

1.2 Ask on which commission split they work with their estate agency. Agents working on a split lower than 70-30 (70% to the agent and 30% to the estate agency) are normally in a much more restrictive business model with office rules which will determine how and where the agent can market the property. 

Agents on a 50-50 or 60-40 commission split are normally bonded by a labour agreement / contract which will be much more prescriptive on how they operate their business and sometimes also on how much room they have as estate agents when they are negotiating a sales agreement - as they might need their office management's permission to drop below a specific commission percentage.

1.3 How long have they been in the real estate industry and in which areas have they worked? 

Establishing local area expertise is very important. Estate agents who can answer the following questions are the fully committed and "fulltime" professionals:

1.3.1 How many competing properties (same price / size / area) are at present in the market and which of the properties offers the best value for money relative to yours and why?

1.3.2 How many similar properties have sold during the last year in the same suburb - how does your property compares in terms of: the price per square meter achieve and the size of the property and erf.

1.3.3 What is the capital growth achieved in your suburb and town during the last year and over the last decade? Is your marketing price in line with the capital growth of your suburb - or is it above or even below?

1.4  How successful have they been in selling properties in your area? 

Ask them to provide proof of their recent sales record - including: 

1.4.1.  contact details of sellers (agent need to obtain sellers' permission).

1.4.2  address of property.

1.4.3  price obtained vis-a-vis original marketing price.

1.4.4 period or days it was on the market.

1.5 For how long should give you on a sole mandate to sell my home and why?

1.5.1 How inclusive or exclusive of other estate agents and agencies will your marketing be? Will you be "opening up" your mandate after the first month to all other estate agents - i.e. to bring their buyers to the property? 

1.5.2 Will you share on a 50-50 basis with all other estate agents - especially after the first month of the exclusive mandate?

1.5.3 Will you hold an "open day" to which you will be inviting all the other estate agents working in the suburb?

1.6 Will you receive weekly updates from the mandated agent on the progress of your sale?

1.6.1  including feedback on all leads generated via the property portals and the social media channels, and

1.6.2  all leads generated via the buyer pool of other estate agents / agencies working in the same suburb (i.e. both via the agent's colleagues and from other estate agencies);

1.6.3  will he or she convey feedback received from potential buyers and other estate agents who has visited the property - within 24 after the viewing?

1.7 How do they pre-qualify the potential buying power of a prospective buyer? 

1.7.1 Do they ask the buyer whether he or she has been pre-approved and for which amount, 

1.7.2 or do they organize a pre-approval for the buyer from a bond originator, before they arrange for a viewing of the property?

1.8 What is their marketing plan to showcase and sell your property within the shortest timespan possible? 

A printed marketing plan spelling out a detailed roll-out program of the marketing tools which are going to be employed as well as the optimal timeframes for each tool, the cost of each tool and the frequency with which the tools will be used.

1.9 Are they using a professional photographer for your home? Are they going to employ a 3D model in their marketing - as well as aerial pictures where it will be possible?

1.10 Do they plan on hosting show days - especially if your property is in an area where there is no serious security risk with having a properly arranged "show day"?

2. Other aspects around the sale and property transfer process to get clarity on

2.1 What would be the ideal marketing or asking price for your house? This is probably the most important question of all. 

2.1.1   Sellers that set the price to an agent normally leads to a very ineffective mandate. A selling price which is "linked by the seller" to the next phase or property in his or her life - i.e. a sales price which needs to buy or pay for something more expensive than the market value of the mandated property, is just setting everyone up for failure.

2.1.2   Leave the asking price to the specialist who will base it on a thorough comparative market analysis. Your price needs to be set at a level where it will be able to compete on value with similar size, age and located properties. 

2.2 How can you stage your home to improve the overall appeal of the property? Homes professionally staged sells 50% faster and for between 8% to 10% more. 

2.3 What costs will you be liable for as the seller?

2.4 Must you give notice to your bank regarding your current bond on the property?

2.5 Must you continue to pay home insurance on your property?

2.6 What compliance certificates are you responsible for providing to the buyer?

Author Benhard Wiese
Published 21 Sep 2023 / Views -
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