The Issue of Trust in Real Estate

Selling or purchasing a property is a big decision.  For most clients we engage with, their property is their largest asset.  It goes without saying that Trust is a consideration for anyone engaging in a property transaction.

Let’s first consider the trust issue for a property purchaser.  A purchaser has the legal right to know of any defects in a property that the seller or the agent is aware of.  Currently, property is sold in South Africa with the “voetstoots” clause – which basically means “buyer beware”.  The onus rests on the purchaser to ask questions such as: “Are there approved building plans?”, “Is there any damp that the seller is aware of?”, “Are there any structural defects or roof leaks that the seller is aware of?”, and the like.

Where there are serious concerns that a purchaser may have, they may consider adding to their Offer to Purchase a clause that states the Sellers response to the above questions.

How does Trust relate to a seller?  For one thing, a seller needs to have complete trust in their agent.  They need to believe that their agent is being transparent and working for them, not against them.  This is best achieved when appointing an agent on sole mandate who will have a legal and contractual obligation to work in the best interests of the seller.

When you interview agents, try to determine if they are able to substantiate their claims.  On what do they base their appraisal value?  Is it factual, or a lie to get your listing?  Do they commit to their marketing plan – and it is in writing?  What kind of service do they promise you – and is their service promise in writing?  What sort of track record and testimonials do they have?  Be sure that you are completely comfortable with their proposal and that they are committed to work for you, not against you.

How does the issue of Trust relate to the estate agent?  An estate agent needs to trust their principal.  What values does their principal have?  Do they show that they live by their values?  A principal that is willing to twist the truth for personal gain, break an agreement, or lie outright, is likely to do the same to you at some point in time.

If you’re an agent and you’re associated with a company where the principal, or your colleagues, act in an unethical manner, then their conduct reflects directly on you.  For a professional real estate agent, our reputation is the most valuable asset that we have.  It wouldn’t make sense to associate yourself with a company or a principal that can damage your good name.

Trust is something that is hard to find in today’s competitive business world.  And yet there are professional and ethical people that are an absolute pleasure to work with.  Work with the right people and value the trust that others have in you.

 

Steve Caradoc-Davies

Principal, Harcourts Platinum

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