W H AT I F ?
Words: SEAN BIDEN Image: © ISTOCKPHOTO.COM
would not have functioned as well as it did for as long as it did. Ultimately, though, buyers will always question the loyalty of the agent, and no matter how you look at it, the agent will always service the needs of the seller first, as the seller is their signed mandate and the origin of their income after all. Look at the commitment between the agent and the respective parties. The agency will sign a mandate with
the seller, spend money photographing the property, take time listing it, and spend considerable money and effort marketing it through the respective channels – all done at risk. The reason for this is simple: if the property is priced correctly it is likely to sell and the agency can bank on a good probability of income derived from the sale. But what do buyers get? No mandate, no resources aimed in their direction – apart from the agent's time and best efforts to find the property best suited to their needs. Every property transaction requires two parties though: a seller and a buyer. And frankly, no single professional has been looking after the buyer’s interests. But, over the past three years, times have changed. Newspaper property sections have been replaced by the Internet, which lists far more stock to look at, and from which to choose. Almost too much, actually. But this is still a tool to draw you to an agency, which lists stock as their primary motive. We are seeing so much stock and such a limited number of buyers that the buyer should have become the prized commodity. Yet, the system still heavily favours the seller. In the US, there is a strong use of Multi Listing Systems. Stock is placed on the system by an agent, inviting other agents to bring their buyers to the property. This has proven to be a very effective system, and one we do see in South Africa, though only on a small scale for now. This leads to listing specialists and buyers’ specialists working together, with agents splitting commission if a sale is successful. In fact, in the US, their total cost will hardly ever exceed 6
percent, compared to the whopping 7.5 percent extracted in our local property regime. The buyer’s agent adds significant value through selecting available stock for the prospective buyer to look at; by running data on house and land price averages in the same suburbs to determine accurate pricing; by negotiating with, and on behalf of, the buyer; and by handling technical matters such as legal contracts, document retrieval, and house inspection follow-ups. At each one of these moments, the needs of the buyer take precedence, and the random arbitrage opportunism that often emanates from the seller’s agent market-pricing system is neutralised. Expect to see two developments in the South Africa property market: firstly, the strengthening of current Multi Listing Systems and the sprouting of new ones; and secondly, the emergence of a new breed of agent – the buyer’s agent. Irrespective, both are good news for buyers. The major role-players will remain but the systems will change. Those agents who adjust and adapt to these changes will increase market share, not because they control the stock but because they are servicing the buyer too. And if you feel that, as a seller, you may suddenly get additional pressure to accurately dispose of your property, rest assured, because you will be a buyer again in the future, and a more efficient market will benefit everyone in the long run. Contact Sean Biden, Head of Sales, Quintessentially Estates, on +27 21 446 3869, or visit www.quintessentiallyproperties.com.
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