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15 May 2014

It has to be remembered that if an agent is good at securing for themselves and their superiors a satisfactory commission, they will probably also have the negotiating ability to secure a good sale price for their client, the seller.

This is according to Bill Rawson, Chairman of the Rawson Property Group, who says the first point to be clarified on this subject is that the service provided by South African estate agents is far more comprehensive and thorough than that of overseas agents working on two or three percent commissions.

He says quite often, such overseas agents do not even accompany the buyer to the property for sale – they simply hand over a set of keys or arrange a date for them to meet the seller. He says then, too, they may place minimal or no advertising, and insist that the seller funds it all. He says this is a common practice, even among the most reputable, high profile UK companies.

Rawson says the plain truth is that the level of service given will depend on the fees charged.

“Estate agents are in one of the few careers where the payment depends almost entirely on the results they achieve. It is simply not possible to give the sort of service South African agents are committed to unless they can charge at the accepted rates prevailing today.”

He says the complaint about high charges is inclined to crop up most frequently when a home is sold quickly and with little apparent effort.

While it is completely understandable that the seller feels overcharged on such occasions, Rawson says it has to be recognised that:

  1. The sale may well have come about because the agency group to which the agent belongs has invested heavily in branding, advertising and IT communications, particularly websites, to achieve a high profile and a large measure of public trust.

  2. The group, if it is at all reputable, will also have invested heavily in ongoing training, thereby giving its agents the skill to market homes competently and to steer away from the many legal and accounting pitfalls that can so easily occur when an untrained agent handles a sale contract.

  3. The franchisee himself will be carrying the high upfront costs of buying or renting premises and telephones for his agents and adapting these so that they become congenial work areas.

  4. All homes do not sell fast and some do not sell at all, and every marketing group’s fee structure has to take this into account.

  5. The agent’s personal costs are also extremely high. He has to own and run a car, laptop, camera and a cell phone and quite possibly has to fund additional advertising to get his own name better known. As mentioned, agents seldom receive retainers – they have to live off their share of the commission they earn for their franchisees and they can go through lean periods in which they earn nothing at all.

Rawson says at the Rawson Property Group, the majority of franchises are charging high standard commissions in all price categories (not just upper end homes) and these are accepted by the clients because the standard of service is generally agreed to be excellent.

He says one cannot emphasise too often that selling so valuable and cherished an asset as a home can be highly stressful. He says the agent’s task is to reduce the stress to a minimum, while at the same time achieving the best price the market can deliver.

Rawson says commissions are often negotiable, but clients should not resent it if their agent proves to be a tough negotiator.

He says it has to be remembered that if an agent is good at securing for themselves and their superiors a satisfactory commission, they will probably also have the negotiating ability to secure a good sale price for their client, the seller.