Buyer Beware: Agent Conmen – and women!

Buyer Beware: Agent Conmen – and women!

Posted on November 23rd, 2009 Huis-Huis 3 comments

Who's the criminal?

I’ve been promoting buyer mandates in some of my posts here for a while now. I believe that buyer representation is a good thing. But if someone wants to abuse something, they will surely find a way. And that’s why I’d like to mention the following incident:

Sandy emailed me about an incident with a real estate agent. (I don’t know if Sandy is a man or a woman, because the subject never came up.) Sandy contacted an agent from an advertising board in front of a house for sale. There were a number of boards in front of the property Sandy was interested in viewing, so we assume that the seller was selling under an open mandate involving various agencies.

The agent came to meet Sandy and his/her significant other at the house, and proceeded to accompany them on a tour through the property. They liked what they saw, and decided to make an offer to purchase the property. The agent took them to her office, and after completing the offer form, requested their signatures on an exclusive buyers mandate form, with the heading “Exclusive Broker Agreement”.

Being of that group of people who actually read documents before signing, Sandy told the agent that they would not sign the exclusive mandate, and that they were surprised about being submitted with such an agreement. They were only looking to make an offer to purchase, after all. They weren’t looking to appoint a buyer’s agent!

To make matters worse, the mandate included terms and conditions that were less than favourable to the poor buyer. The mandate period, for instance, was twelve months!

To be fair, an agent is well within their rights to request an exclusive buyer’s mandate from a buyer, just as Sandy and company were well within their rights to refuse such a mandate. But where the story takes a less than kosher turn, is when the agent refuses to submit the offer to purchase to the seller, unless Sandy and partner sign the exclusive mandate.

That’s just not right. Anyone can see that!

The agent had no right to try and coerce these potential buyers into signing a sole mandate by threatening not to submit their offer to a seller (who already mandated the agent to sell a property on their behalf). A real estate agent in South Africa is OBLIGED to submit ALL offers on a property to their client, unless the seller instructed the agent to the contrary.

And I find it hard to believe that an open mandate seller would instruct an agent not to let them know about offers unless the offerees sign an exclusive buyers mandate for a year. The seller would gain absolutely nothing from such an instruction.

Sandy wanted to know if it would be alright to contact another agent to submit an offer, because the agent had told them that they would be liable for double commission if they did.

I replied that that agent was full of it. Sandy had never mandated the agent, so they would not be liable for commission. The agent was acting (or rather, SHOULD have acted) for the seller, and would be paid by the seller. So, there was no double commission threat to the buyer.

Anyway, if this agent claimed commission from the seller after selling through another agent, she would have to prove that she was the effective cause of the sale. But by refusing to submit Sandy’s offer, she clearly proved herself to be an effective OBSTRUCTION to the sale.

I advised Sandy to contact another agent, or even the seller directly, and to report the incident to the Estate Agency Affairs Board. I believe that this agent should not be allowed to con the public of South Africa one day longer.