Rise of The Rogue Agent
About two years ago, a documentary was aired on British television showing a side to ESTATE AGENTS that very few people know about. This unflattering documentary show cased the extent to which some British agents would go to make a sale. It seemed these rogue agents would present the seller with numerous fake offers to purchase that were radically below the original asking price. This would then force the seller to drop the asking price in a desperate attempt to sell and re-list the property in what is apparently a more realistic and market related price.
This trend has seeped into South African industry. However instead of lowering the price, the rogue agent would pull a similar stunt to keep the property off the market and out of reach of other agencies. What usually happens is that the seller will be presented with an offer to purchase at the asking price and very attractive conditions. The seller will then notify all other agents marketing the property for sale. This gives the agent enough room and time to find a real buyer with no competition. The seller will then be notified that the offer to purchase has been withdrawn for various reasons which include the €buyer' withdrawing the offer due to unforeseen problems acquiring finance or the €buyer' died.
Eventually the agent will produce a real buyer but the Transfer Process will have to start from scratch. The seller is severely prejudiced by this for many reasons and some being that the seller may have made plans with the first offer and obligated himself with the income he was due to receive; or the seller makes a plan to find other accommodation in anticipation of the sale and he ends up having to pay for the new accommodation as well as the property currently on the market and any other holding costs. The most unfortunate thing is that the property may end up being sold below the market price. This is because listed properties have a window period of about four weeks where interest for buyers is high, after the four weeks potential buyers tend to lose interest and move on to new listings.
Fransiska Schutte, the owner of Real Net Wilgers & Surrounds in Pretoria, suggests that property sellers should take precautionary measures to ensure that offers to purchase are genuine otherwise they are at risk of delayed transactions and incurring extra holding costs. She advises that sellers should insist on seeing a copy of the offer to purchase on the day of it being signed. The seller should also verify the contact details of the transferring attorney and personally follow up on progress especially if and when a bond was approved and the amount. Schutte goes on to say if a bond was not granted or if guarantees were not issued on the predetermined date then the chances of the transaction being finalized is pretty much none existent. She also recommends that it would be prudent to exercise the option of a back up offer considering the current economic climate where approximately only 60% of all bond applications are approved.
http://www.etchellsandyoung.co.za
This trend has seeped into South African industry. However instead of lowering the price, the rogue agent would pull a similar stunt to keep the property off the market and out of reach of other agencies. What usually happens is that the seller will be presented with an offer to purchase at the asking price and very attractive conditions. The seller will then notify all other agents marketing the property for sale. This gives the agent enough room and time to find a real buyer with no competition. The seller will then be notified that the offer to purchase has been withdrawn for various reasons which include the €buyer' withdrawing the offer due to unforeseen problems acquiring finance or the €buyer' died.
Eventually the agent will produce a real buyer but the Transfer Process will have to start from scratch. The seller is severely prejudiced by this for many reasons and some being that the seller may have made plans with the first offer and obligated himself with the income he was due to receive; or the seller makes a plan to find other accommodation in anticipation of the sale and he ends up having to pay for the new accommodation as well as the property currently on the market and any other holding costs. The most unfortunate thing is that the property may end up being sold below the market price. This is because listed properties have a window period of about four weeks where interest for buyers is high, after the four weeks potential buyers tend to lose interest and move on to new listings.
Fransiska Schutte, the owner of Real Net Wilgers & Surrounds in Pretoria, suggests that property sellers should take precautionary measures to ensure that offers to purchase are genuine otherwise they are at risk of delayed transactions and incurring extra holding costs. She advises that sellers should insist on seeing a copy of the offer to purchase on the day of it being signed. The seller should also verify the contact details of the transferring attorney and personally follow up on progress especially if and when a bond was approved and the amount. Schutte goes on to say if a bond was not granted or if guarantees were not issued on the predetermined date then the chances of the transaction being finalized is pretty much none existent. She also recommends that it would be prudent to exercise the option of a back up offer considering the current economic climate where approximately only 60% of all bond applications are approved.
http://www.etchellsandyoung.co.za
