Discount agencies: You could easily lose more than you gain
Category Seller Advice
It may be tempting to appoint a low commission or “discount” agency to sell your property, but it is very likely that this decision will cost you more money in the end than you would have saved on commission.
So says Charles de Kock, owner of the Chas Everitt International franchise covering the Southern Cape, who notes: “There are discount agencies popping up everywhere at the moment and making all sorts of claims and promises to home owners, but most of them are being run by people who have very little real estate experience and in some cases are not even qualified agents.
“The property sellers who give such agencies mandates to market their homes are thus exposing themselves to all kinds of legal and financial danger. Sale agreements can and do go wrong, and even before it gets to that stage, agents who are not sufficiently trained or knowledgeable when it comes to reading the market will struggle to price the property correctly. Also, if they do not have access to the marketing resources of a big group like Chas Everitt International, they will have great difficulty in exposing it to enough potential buyers.”
And the problem with that, he says, is not only that the property could stick in the market and become “shop-soiled” because it is overpriced and/ or under-exposed, but that the seller will have to keep on paying his bond, rates and taxes, electricity and water charges, insurance premiums and security and maintenance costs as long as the property remains unsold.
“These holding costs can mount up very quickly, and within a couple of months could easily total more than the potential saving offered by a low commission agency that does not have a big enough marketing budget to be able to inform and attract a sufficient number of potential buyers.”
De Kock says it is obvious that discount agencies will have less money to spend on marketing and advertising than groups like Chas Everitt International, which is able to market its clients’ properties to hundreds of thousands of potential buyers around the country via all the major property print media and the property portals, and also has access to millions of international buyers via its membership of Leading Real Estate Companies of the World®.
“On top of that, we also have huge brand recognition, which brings many potential buyers directly to our own Chas Everitt websites when they are considering a move or an investment property purchase. Home buyers know us and trust us and are simply much more likely to buy through us than through low commission agencies that they don’t know.
“This is evident from the fact that over the past three years we have increased our national market share by 13,6% in terms of the number of homes sold, and by 17,6% in terms of the value of homes sold. What is more, our average listing time is currently 63 days, while the October FNB Property Barometer says the national average across all agencies is 111 days.”
Home sellers should also know, he says, that all Chas Everitt International full status agents are fully qualified to at least NQF4 level and registered with the Estate Agency Affairs Board (EAAB), while all intern agents in the group operate under proper supervision. “Our agents also have continuous access to top-quality training as well as regular expert market and legal updates, so they have a wealth of real estate knowledge at their fingertips as well as a track record of success.
“We know that this is unfortunately not the case for many of the agents working for low commission agencies, and would seriously advise all home sellers to ask agents for their current EAAB registrations before they agree to allow them to market their homes. They should also check what sort of track record the agent has in their area and ask for references and recommendations from recent clients that they can contact. If the agency has no record of success in your area, why would you trust them to do a good job with your biggest asset?”
Meanwhile, says De Kock, home sellers should also not underestimate the value of working with an agency that is able to pre-qualify buyers and will not waste your time by bringing people to view your home that cannot afford to buy it. “In addition, we are also set up to assist potential buyers with their home loan applications through BetterBond, which is the biggest bond originator in SA, and that is another big advantage to sellers who don’t have to spend weeks anxiously waiting to find out if their buyers were able to get a loan.
“In short, home sellers really need to look beyond ‘low commission’ offers to what level of knowledge and service they will – or won’t – be getting from their agent when they sign a mandate, and to realise that a sale that is botched or delayed could easily end up costing them more than the ‘discount’ being offered.
“Homes don’t sell themselves, especially in slow markets. It takes a high level of expertise, training, marketing and buyer trust to achieve the best possible price in the shortest possible time, and that requires the resources and track record of a well-established real estate brand like Chas Everitt International.”
Issued by Chas Everitt International
For more information
Contact Charles de Kock
On 082 920 9341
Or visit www.chaseveritt.co.za
Author: Meg Wilson