ESTATE AGENT AND OTHER PARTIES INVOLVED ddv3332 ESTATE AGENT AND OTHER PARTIES INVOLVED Principal A person or body who engages the services of an estate agent and is responsible for the payment of the estate agent’s fees in respect of the services rendered by such estate agent Third parties Any other person who may be linked in some way with a particular estate agency. Normally refers to the purchaser or tenant. 15-May-18 DDV3332

The relationship between an agent and principal and third party ddv3332 The relationship between an agent and principal and third party An agent is elected by the principal to carry out the principal’s instructions. The agents then has a relationship with the principal who is the agent’s employer. The agent also has a relationship with the third party when closing a deal. A sub agent exists when the first agent uses the services of another agent. Here the sub agent cannot request payment with the principal as there is no relation ship between them. The relationship exists between the first agent and sub agent only. 15-May-18 DDV3332

THE RESPONSIBILITIES OF A PRINCIPAL TO AN AGENT ddv3332 THE RESPONSIBILITIES OF A PRINCIPAL TO AN AGENT As a client using the services of an agent the principal must pay all the fees due as agreed in the agreement The principal must furnish the agent with all the relevant details of the property on offer or required. The details must be true and not falsified. 15-May-18 DDV3332

THE RESPONSIBILITIES OF AN AGENT TO THE PRINCIPAL ddv3332 THE RESPONSIBILITIES OF AN AGENT TO THE PRINCIPAL Agent must be honest and trustworthy Must be professional Be cost conscious and not take advantage of the principal Information disclosed must be true and accurate Agent has to act as the representative Has to act in the best interest of the principal Should not make personal gains from the agency Should not oppose the principal wants and requests Agent has to have a separate a/c for clients All deposits from the purchaser has to be deposited into a separate a/c from the agent’s Agent has to be loyal and follow all instructions by the principal In terms of minimal deposit and other special instructions like chattels ( like ac units, or fittings included or not) 15-May-18 DDV3332

Agent is responsible as per appointment ddv3332 Agent is responsible as per appointment Even if a sub agent is appointed the first agent is responsible to the principal Agent cannot act on behalf of the owner or purchaser without disclosing all information An agent cannot collect fees from both the principal and third party, unless both the principal and third party have the knowledge and both parties agree. In principle the agent represents the owner, therefore there will be a clash of interest if the agent also represents the third party Agent should not take the opportunity to make personal gains for himself An agent cannot buy the property from the principal unless the principal agrees to it. This is to avoid the agent buying the property cheap and selling for a profit 15-May-18 DDV3332

ddv3332 FIDUCIARY DUTY A legal duty an agent owes his or her client in a real estate transaction Acts on behalf of client with the utmost of care, integrity, honesty, confidentiality, and loyalty. The agent is a trusted advocated A fiduciary relationship is therefore the most important legal relationship any 2 people can have. It is built on the highest trust where the agent is designated the legal caretaker of his client 15-May-18 DDV3332

THE RESPONSIBILITY OF AN AGENT TO THE THIRD PARTY ddv3332 THE RESPONSIBILITY OF AN AGENT TO THE THIRD PARTY Has to be honest to the third party All pertinent information regarding the property must be disclosed Cannot withhold information which may influence the sale or tenancy Cannot give false information about the property such as future sale price or about existing or future facilities within the locality of the property Can be considered fraudulent for any of the above actions. Can be reported to the Board and legal action can be taken 15-May-18 DDV3332

THE IMPORTANCE OF LISTING ddv3332 THE IMPORTANCE OF LISTING Listing means the obtainment from a principal, instructions to sell or buy or rent a property. It is in the form of writing. Listing agent means an estate agent who obtains a listing and has been given the rights to sell or buy or rent the property by the principal Multiple listing occurs when the listing estate agent is a member of a group of agents who have arrangements to exchange listings. Normally the listing agent obtains an exclusive right to sell or buy or let a property, but permits other estate agents in the group to show the property to prospective buyers, with the understanding that if the sale is made through the efforts of a sub-agent or co-agent other than the one who obtained the listing, the agency fee is split between the 2 agents on a pre agreed basis The more listing an agent has, the more fees an agent can collect Listings are assets to the agent 15-May-18 DDV3332