Author : Angelique Arde -Personal Finance
6 November 2011
Sellers, listen up: make sure you are very clear when giving instructions to your estate agent about what offers you will accept from potential buyers. If you aren’t clear, you could lose out on a sale as a result of your agent’s refusal to take certain offers.
A Cape Town-based teacher who is looking to buy her first property had two estate agents refuse to take offers from her in recent weeks. In both cases, Ms C was not permitted to present a written offer to purchase because the agents said her offers were too low or unattractive to their clients.
Is an estate agent allowed to refuse to take an offer from a prospective buyer?
The short answer is: yes.
Adrian Goslett, the chief executive of RE/MAX Southern Africa, says estate agents have discretion – in terms of the mandate and instructions from their client – as to whether or not to take an offer.
However, Goslett says he feels that all offers to purchase should be presented to the seller. “The seller must be given the opportunity to review all offers – especially in today’s market, where we’re seeing properties go for 20 to 30 percent less than the asking price because of financial pressure on sellers. So, I would say, given the discrepancy between prices asked and prices being fetched, all offers should be presented to the seller,” Goslett says.
Dr Andrew Golding, the chief executive of the Pam Golding Property Group, says agents are obliged to comply with the code of conduct set out by the Estate Agency Affairs Board (EAAB).
Quoting verbatim from the code, Golding says clause six of the code specifies that “no estate agent, who has a mandate to sell or purchase immovable property, shall wilfully fail to present or cause to be presented to the seller or purchaser concerned any offer to purchase or sell such property, received prior to the conclusion of sale in respect of such property, unless the seller or purchaser (as the case may be) has instructed him expressly not to present such offer”.
Milton Koumbatis, a director of Miltons Matsemela conveyancers, explains: “If my property is on the market for R10 million and an eccentric buyer wants to offer me R1 million, my estate agent would be reluctant to take that offer because my agent wouldn’t want to waste my time. My agent is duty bound to bring all offers to me, unless I’ve given an instruction otherwise.”
Koumbatis says such an instruction need not be in writing or in the mandate – an “ordinary (verbal) instruction” will do.
So in the case of Ms C, the estate agents who refused to take her offers may have been within their rights if their clients had instructed them to present offers only of or over a certain amount or of a certain nature.
Charlene Steenkamp, an estate agent who works for Leapfrog in Table View in Cape Town, says presenting all offers is the right thing to do.
“You just never know what a seller might accept. Years ago, my husband and I found a place we wanted to buy for investment purposes. It was on the market for much more than we were willing to pay. We told the agent what we wanted to offer, but she refused to take our offer – which was a very cheeky one! But we dug in our heels and insisted she take the offer. After much haggling, she took it to the seller, and the seller accepted it,” Steenkamp says.
The sole purpose of an estate agent and his or her duty to a seller is to make a sale for that seller, Steenkamp says.
“If we don’t submit all offers, we don’t stand a chance of making a sale, albeit a small one in a case where the offer is much lower than the seller was expecting.”
Golding says that in the current market “it would be foolish to speculate on what a seller might ultimately accept, and that is all the more reason, from a business perspective, to present all offers”.
Only offers that are in writing are considered to be bona fide offers in terms of property law, he says.
“While the code is clear on the obligation of the agent to present all offers to a seller, good business practice dictates that the agent should advise the buyer of the merits, or demerits, of presenting a proposed offer,” he says.
Golding, who is also the national president of the Institute of Estate Agents, says that where an estate agent fails to comply with the code, a charge of conduct deserving of sanction against the agent may be investigated by the EAAB or a committee of inquiry.
“Estate agents who are found guilty of conduct deserving of sanction may have their fidelity fund certificates withdrawn and/or may be subject to other sanctions specified in the Estate Agency Affairs Act,” Golding says.
View the original article here: https://www.iol.co.za/personal-finance/agents-can-refuse-to-take-your-offer-to-purchase-1172007