ESTATE AGENCY: MEANING, TYPES, ROLES AND FACTORS

The term estate agent is a combination of two words: estate and agent.

Ordinarily, estate referred to a piece of land owned by a single individual or group of people.

However, legally, We can define estate as an interest held in land or landed property.

An agent is someone who does something on behalf of another person.

An agent can also be defined as a person or business entity authorized to act on behalf of another person in a business transaction.

An estate agent can, therefore, be defined as a person who carries out estate transactions on behalf of another person.

It can also be defined as a person who sells, acquire, leases and manages various types of land and landed property on behalf of a client in exchange for a monetary commission.

Estate agency

An estate agent usually acts on behalf of a client and may liaise between a property owner and buyer.

The activity carried out by an estate agent is called estate agency

Types Of Estate Agency

There are four types of estate agency, namely; sole agency, joint agency, multiple agency and sub-agency.

1. Sole agency: This is a situation in which the property owner has given only one estate agent the sole instruction to market and sell the property.

Based on the instructions of the property owners, a sole agent can act on behalf of the property owner in matters relating to the sales, purchase, letting, and management of land and landed property.

When a sole agent is appointed, the property owner cannot employ the services of another estate agent on the same property that a sole agent is handling, unless the agreement between him and the sole agent is terminated.

If the property owner breaks the sole agreement by instructing another agent, the seller will have to compensate the sole agent adequately and fairly or face legal action.

A sole agency is also known as an exclusive agency because the agent has the sole and exclusive right to sell the property on behalf of its client.

2. Joint agency: This is a situation where the property owners instruct multiple agents to work together to sell a property.

In a joint agency, the property owner mandates multiple agents to work jointly on a particular real estate transaction.

The commission from the joint agency is usually shared between the participating agents.

When a joint estate agency is to be created, the property owner will usually introduce each estate agent who will be involved in the joint agency to each other.

He would have to explain the contractual obligations and duties of each estate agent, as well as how they would work together to achieve the client's aim of selling a home

It's worth noting that a joint agency is sometimes called a Joint sole agency.

3. Multiple agencies: This is similar to a joint agency, except that instead of working together, different estate agents compete.

In other words, multiple agencies refer to a situation in which a property owner instructs various estate agents to sell the property, with the first estate agent to present a buyer receiving the entire commission.

In multiple agencies, it is only the estate agent that is successful in bringing a buyer that gets the commission. However, in the joint agency, each estate agent involved gets a share of the commission.

This form of estate agency is utilized by property owners who need to sell their properties quickly or when selling land is challenging.

However, multiple agencies have the disadvantage of potentially causing unhealthy competition among the estate agents engaged.

4. Sub-agency: This is a situation where an estate agent goes further to transfer his right to sell a property to another estate agent, who will work under his supervision 

Sub-agency is mostly common with the sole agency and less common with multiple agencies.

Sub-agents differ from the above-mentioned type of agency in that they do not have direct instructions from the seller and instead operate as assistants to the estate agent who has received instructions from the sellers to sell a property.

When a sub-agency is about to be established, the main agent and sub-agent will agree on a fee-sharing ratio.

This is to ensure that there is no disagreement between both parties when the property is successfully sold.

Role Of Estate Agent In A Property Market

1. Provides necessary information: In a property market, an estate agent provides necessary information on properties that are offered for sale

2. Observe market trends: Estate agents must keep a close eye on the property market to keep up with the latest information on properties for sale.

He has to observe and monitor the activities going on in the property market so that is kept up to date on the most recent developments.

3. Carry out transactions: An estate agent executes transactions on behalf of the seller.

He ensures that the goals of a seller regarding a transaction are adequately met.

4. Provide expert advice: As a certified specialist in the industry, the estate agent also provides expert advice to buyers and sellers alike on matters relating to the property being sold

5. Protect the interest of both the seller and buyer: As a professional, an estate agent is expected to act not only in the seller's best interests but also in the best interests of the buyer.

Generally, a buyer would want to ensure that he gets maximum value for his money.

That would have to be taken into account by the real estate agent as well.

Reasons (or need) for Estate Agency

1. Growth of corporate ownership of property: People's interest in the construction industry has grown over time, and as a result, cooperative bodies and ownership of such structures have emerged, necessitating the services of an estate agent to act as a liaison between them and the general public in terms of leasing, negotiations, and loans, among other things.

2. Problems of absentee landlords: When landlords are unable to be present on their property at all times due to work or location, an estate agent is required to oversee thing

s in his absence and provide feedback on the property.

3. Tax factor: Because he is a certified specialist in the industry, the estate agent advises the landlord on the appropriate taxes that must be paid when due, so that he does not overpay taxes.

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4. Urbanization: As a result of the increasing number of people moving from rural to urban areas, estate agents are required to assist these individuals in locating buildings for rent or sale in urban areas.

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