SOME months ago, we began discussion on the all-important real estate industry.
Today, my focus is on the “agent”, who is usually the facilitator in introducing properties to persons, and persons to properties.
However, as in any service industry, certain steps should be followed by owners, property managers, or persons wishing to purchase, lease, or rent property.
Let us look at the questions to be asked:
1. How do I choose an agent and know that I would be given the required service?
2. Do I need the service just this once or for an ongoing period?
3. What responsibilities would I need to give this person and what services do I require?
4. What specific calibre of client am I aiming at or who would require my location and amenities?
This type of questioning should be contemplated so that an appropriate decision is made upfront.
One of the main reasons is to avoid waste of time on either side, so let’s look at the categories of agents.
1. A broker is generally one who has an established agency from which other agents operate.
2. An agent could operate out of an agency, and handle listings, sales, or rentals, or a combination.
3. A referral agent is often a person who does not have a designated office, but operates in an open system, bringing the principle agent and the client together, for a percentage fee.
4. There is also the informal freelance agent, who finds persons for landlords or sellers.
Simple wisdom would dictate that the business of sales or rentals of property should be handled seriously by trained or experienced and established operators, for the following reasons:
1. As our country progresses, we have a wider range of clients of various backgrounds, needs, and expectations.
2. Whatever was previously acceptable by word of mouth, taken for granted, or expected, now needs to be documented.
3. Greater due diligence is necessary in vetting and choosing tenants or even purchasers.
4. New modern methods of rental and payment collections must be implemented to assist with seamless recurring transfers and receipts.
5. Above all, persons must be accountable and responsible for the services offered.
So let’s look at some specific situations.
When we think of selling a valuable property, we should seek guidance and make the necessary preparations.
1. Consult our banker, lawyer, insurance company, appraiser, Lands & Survey Dept., Property & Income Tax Dept., to obtain up-to-date values, balances, land use issues, etc. and arrive at an appropriate asking price. We just should not decide that we want X dollars and proceed. The simple reason is that we may either underestimate or overprice our property above the market value.
2. When we have prepared the preliminaries and our ownership documents are in place, we need to prepare the property for showing.
3. At that time, we are ready to consult various agents, before signing a listing agreement.
But what would determine our choice of agency or agent? It actually calls for discussion to consider the property features, how the listing would be handled, marketing and promotion, showings, pricing and fees. An important consideration is the timeframe required. Is it a normal offering, or of an “urgent” nature? If so, how negotiable is the asking price? Then comes the listing agreement, which covers the details.
We would do well to ensure that the agent is experienced and knowledgeable, able to execute all of the necessary processes to completion, and with access to our lawyers, especially if we are resident overseas or perhaps using a family member or friend to assist.
Like everything else, an urgent sale requires that the agent could co-broker with others, to spread the word and increase the opportunities for showings. Professional teamwork often pays off.
Choosing an agent for rental of property is not quite as involved, but requires a degree of care and attention. One important factor is definitely the difference between offering a fully-furnished house, a number of furnished apartments, or an unfurnished apartment, with or without tenants. However, if we own a number of units, it may be best to select with a long-term view. Though the main clauses are similar, particular clauses must be in place for damages, insurance of contents, inventory lists, natural disasters, central utilities, ground maintenance, termination notices, refunds, renewals, etc.
In the absence of owners, special mention must be made of the powers and responsibility of the property manager, especially where periodic inspections, repairs, cleaning and rent collection are concerned.
The agent, who will act also as property manager, must be properly chosen and paid accordingly. In practice, it is absolutely necessary to give that agent or property manager a list of the utility company account numbers, meter numbers, plus names and telephone numbers of all household service providers such as electricians, plumbers and gardeners, who would already have knowledge of the property.
At this juncture also, it is vital to decide whether to engage a principal agent, with exclusive responsibility, or to offer “open listing” to a few agents and see who brings home the bacon.
In most jurisdictions, persons find it easier to sell through a single principal agency for a slated period of time after which they are free to change to another. This allows for some buoyancy as that agent could still share the listing with others on a co-broking basis.
It means that a number of agencies and agents could introduce their clients to the property, through that principal agent. This system works well, especially in franchise systems, real estate associations, or related groups. This, however, requires a level of uniform modes of conduct under a multiple listing system, which would be established.
In a subsequent publication, I would want to focus on those of us who are prospective tenants or purchasers, so as to give a complete picture of the various scenarios, and empower us all in making the right choices and taking correct decisions.
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….I would hope that brokers and agents would be required to attend a period of educational training that would lead to a license to operate on the island. I didn’t get that information from the article.