Professionalism in Real Estate... or not?

After passing the Professional Designation Examination (PDE), full-status estate agents may use the designation 'PPRE'. I am sure the public would have noticed as much since 2012. PPRE is the acronym for 'Professional Practitioner Real Estate'. Now the question that arises is to the relevant knowledge, compliance and professional conduct of this estate agent who the buyer or seller has entrusted the sale or purchase of his/her home to.

1. Relevant Knowledge that needs to be communicated to clients:

1. 1 Up to date knowledge of local real estate market conditions is essential, i.e. the historical and current data relating to the number of sales and rentals that take place monthly/annually, the relevant target markets to enable the introduction of properties that are for sale to the correct market as well the financial trends with respect to purchasers.

1. 2 The agent also needs to be totally au fait with all costs involved in the sale process in order to ensure that the clients can be informed and aware of their responsibilities -

• When purchasing a property the possibility exists that costs pertaining to inter alia deposits, mortgage bond costs, conveyancer's fees, Transfer Duty vs VAT, Deeds Office Registry Fees, Municipal provision for Rates and Taxes, possible occupational consideration exist.
• The costs involved in selling a property like inter alia compliance certificates, Rates and Taxes clearance certificate, bond cancellation fees (if applicable) and possible penalties, estate agency commission, possible Capital Gains Tax if the property is not the seller's primary residence, or even if it is, and the gain exceeds R2m or the size of the property exceeds 2ha.

1. 3 A professional estate agent must also have a good knowledge of the legislation pertaining to estate agency, property sales and ownership as well as the legal aspects pertaining to all contractual aspects of purchasing and selling, especially the general principles of contract and the terms and conditions of the agreement of sale in particular. Pertinent issues that need to be explained to the parties to the agreement would inter alia be 'What is included in the sale?'; 'Defects and the Voetstoots clause'; 'Occupation and Occupational consideration'; Cooling Off Rights'; the timing of Risk passing to the purchaser; 'the meaning of Suspensive and Resolutive conditions'; the requirements for a valid Offer to Purchase and a valid acceptance'. Counter-Offers by sellers after receipt of an unacceptable offer to purchase (OTP) from the purchaser also need to be handled with the necessary due diligence in order to ensure validity thereof. The non-possibility of electronic signatures (even in the electronic age) pertaining to agreements for the sale of immovable property must also be adhered to in order to ensure a valid Deed of Sale.

1. 4 When the owner of a property agrees to grant an estate agent a sole mandate to sell his/her property, the agent is the sole holder of the right to sell the property, but this sole selling right does not exclude the seller from selling his/her own property him/herself. It only restricts the right to one particular agency over and above the seller's own right to sell. This mandate must be in writing in terms of the Estate Agency Code of Conduct and be for a reasonable period of time and contain a termination date. The right to sell lapses at the end of the agreed term and the seller can then grant the estate agent an extension of the sole right or grant an open mandate to a number of estate agencies. In the case of an 'exclusive sole mandate', the same applies as for a sole mandate except that the seller's right to sell his/her own property is excluded.

2.Legal Compliance

In order to operate legally, all estate agents* and estate agency principals** must, as from 15 July 2008 be in possession of the following registered qualifications: FET Certificate: Real Estate (estate agents) or the National Certificate: Real Estate (for principals of estate agencies).

*An estate agent is someone or an agency who undertakes the marketing of real estate for sale or for rental on behalf of a client or the management of immovable property on behalf of a client. All estate agents must be in possession of a valid, current FFC (Fidelity Fund Certificate)

A **principal estate agent is any director of an estate agency company, member of a CC, a partner in Partnership, or the Sole Proprietor of an estate agency. All principals and their agencies must be in possession of a valid, current FFC.

Intern estate agents must after their internship period and qualifying, pass the Professional Designation Examination (PDE) set by the Estate Agency Affairs Board in order to be able to use the designation PPRE and obtain a full-status FFC. The same applies to a principal who must pass the principals' PDE in order to be afforded the status as MPRE (Master Practitioner Real Estate).

3.Ethical and Professional Conduct

3.1 An estate agent is obligated to the following ethics in terms of conduct:

• at all times to maintain a position of trust towards a client
• to act in the interest of the client
• always to use reasonable care and skill when doing business on behalf of a client
• to avoid a conflict of interest (his/her own vs the client's)
• not to make secret profits
• not to disclose or abuse confidential information
• not to make false statements about a client's property
• to account for all monies received on behalf of the client
• to communicate with the client and give written feedback

3.2 Professional conduct that clients can and should receive:

• Analysing and appreciating the clients' (both purchaser and seller) needs
• Obtaining information about the seller's property and planning a suitable marketing strategy
• Honesty, transparancy and fairness to all parties involved
• Maintaining contact by providing regular feedback during the marketing and selling process (both to purchaser and seller)
• Presenting offers and counter-offers in a professional and unbiased manner
• Good after-sales service with regular feedback pertaining to the conveyancing process

Please feel free to contact any REDZetc agent in your area. Our office number for any information regarding REDZetc agents is 021 881 3311. The directors, Pam Snyman (082 8000867) or Dawie Snyman (084 5811622) are also always available should you wish to enquire about any real estate matter. Any queries can also be directed to info@redzproperties.co.za.