by datta Nighut 
1. Introduction to Real Estate Agents and Their Role
This paper discusses the collaboration that occurs between a Real Estate Agents and a property seller during the process of selling a property. The selling of a property is a complex and time-consuming process due to the unique nature of properties and due to different property seller and buyer characteristics. Property sellers engage the services of real estate agents as property experts for advice, assistance, and expertise that only real estate agents possess.
The exclusive right to sell gives the real estate agent the right to manage the whole selling process. The decision-making process is closer to a principal-agent relationship than any other type of agency relationship.
Even though it is a complex, relationship-driven process, only a small part of the selling process has received any kind of attention; notably, the principal-agent relationship and its specific problems have been highlighted and discussed. But the knowledge of how real estate agents and property sellers collaborate to make decisions and progress through the process is limited. In fact, very little is known about how this collaboration is conducted, particularly at a micro level. When the selling process is successful, it is the result of collaboration and explicit or tacit partnering between a property seller and a real estate agent.
The Process that The Real Estate Agent Should Follow
When a real estate agent assumes a mandate from a seller for selling one or more properties, the collaboration begins between both of them and especially with the salespersons working within the agency.
The role of the latter, during this collaboration, is to ensure that all the services usually offered by the company are appreciated by the seller, so that they become more aware of the input needed for the success of the commercial transaction. Following the previous steps, the operational part of the mandate rises with the processing of the advertising forms and advertising media, drawing up the descriptive part of the properties and, if necessary, carrying out plans or cadastral plans, processing the technical part of the documentation and assisting the seller in evaluating the possibility of a specific technical report, necessary for the sale at an increased ranking.
The promotional phase is the final part when the properties are offered to interested parties, giving rise to visits and possible negotiations. In conducting negotiations, the real estate agent pays particular attention to how sensitive the seller is to agreeing on the price, timing, terms, and conditions of the deed, as well as the payments and legal terms, in case the proposal is of interest. When an agreement is reached, the bureaucracy begins with the provision of necessary documentation for the formation of the proposal, any preliminary contract, stipulation to the public notary of the regular instrument for the final deed, and other due diligence until the deed itself is executed and the transfer of ownership of the property.
2. The Process of Listing a Property for Sale
Real estate agents are sales agents who assist property sellers in marketing their property for a predetermined fee or commission. Property sellers and real estate agencies typically sign an agency sales agreement, which grants the sales agent the exclusive right to market the property during the term of the contract.
The agency charges the commission to finance the promotional and marketing activities that the law requires. The real estate agent is crucial to the property seller, as the agent is an expert in promoting property to the market, has direct access to potential buyers, and assumes the role of primary negotiator on behalf of the property seller.
The property owner is required to reimburse the agent for all reasonable expenses. 2. The Process of Listing a Property for Sale When a property owner wishes to list a property for sale, he or she may commence the process in several ways.
The property owner can contact a local agent directly or invite a number of agents to submit a marketing proposal, with the agent selected that the property seller believes to be the most competent and willing to represent the best interests of the property seller.
Once a property seller has identified an appropriate agent, he or she is by law required to sign an agency agreement, which details the scope of the agent’s authority to act on behalf of the property seller. Only with a signed agency agreement can the sales agent commence promoting or marketing activities on behalf of the property seller.
3. Marketing Strategies and Techniques for Property Sellers
This section commenced to introduce some concepts of marketing and provides a brief review of the works done previously in marketing real estate. Marketing, being an essential and critical activity in business, has the duty of creating customer awareness and generating customer demand. It indigenously connects the firm to the market environment and supports the markets in finding suppliers, allowing the suppliers to gain large comparative preeminence.
Marketing is a program that gives order to the sequence of planning, creation, and delivery of a product that resolves a need for a customer at a competitive cost. Sellers have traditionally used a few basic marketing strategies to promote property.
The oldest recorded technique, known as the open listing, allows the seller to deal simultaneously and privately through multiple agencies to expose the property to different customers’ clientele through their Multiple Listing Service or through open houses or classified advertising.
The second strategy, the exclusive-right-to-sell listing, specifies that one real estate agent has the complete right to sell the property at a fee agreed upon by the seller, whether or not the agent or some other agent sells the property using the multiple listing services of a local real estate board. In return, the listing agent undertakes the creation of advertising, promotion, and compensation to other agents and shares their commission with the sellers.
4. Negotiation Skills and Closing the Deal
Before accepting any offer, agents should have reservations about the following key negotiation skills: Firstly, they must be able to read the body language of bidders. Bidders will exhibit strong body language if they are interested and weak or none if indifferent. Good negotiation skills involve asking questions that allow the agent to gauge the level of interest and financial limits of the person making the offer.
Secondly, agents must have superb verbal communication skills to drive discussions towards the seller’s optimal goals – the highest price for their property. Agents should never confirm whether offers are more or less than their client’s desired price levels. Another important skill is the ability to appraise the buyer’s financial capability.
This can save considerable time and effort for both the agent and the seller. This allows the sellers to consider only the most viable property seekers. Likewise, the bids received would be from either the more capable people who are genuine property seekers or persons who are not really in a financial position to make a realistic offer.
5. Legal and Ethical Considerations in Real Estate Transactions
The Real Property Act 1900 states that only a person licensed to do so under the Property, Stock and Business Agents Act 1941 (NSW) may carry on a business as a real estate agent, act as an auctioneer, act as a strata managing agent, or on behalf of another person perform any of the functions of a licensee in this Act, proposes to enter into a particular contract for sale, or a person for whom the transactions referred to in paragraph (a) are to be carried out.
It is important that real estate agents are aware of recent case law which helds varied opinions on the meaning of ‘carry on a business as a real estate agent.’ Each case turned on its own facts; however, it has generally been held that as one of the main purposes of the 1941 Act is to protect the public, the interpretation of the term should be as broad as possible.
Vendors should endeavor to keep the action within the bounds of legislation by applying for information directly from the council surveyors to avoid problems and unforeseen expenses at the last minute. Violation of this requirement, whether or not a licensee’s commission has been reduced correspondingly, will render the earning of commission unlawful.
Even if a vendor instructs an agent to fulfill obligations under the agency, a vendor is the principal with a licensee who acts on behalf of the principal. Therefore, in New South Wales, the real estate agent should always present an offer promptly to the vendor.
Where the property has been sold for an amount less than that offered by the offeree, that offeree may be personally liable to the vendor for the difference. A person who considers that he has a claim against a licensee may initiate a claim against that licensee.
Although many vendors do take up such insurance, they may not be aware of the deadweight of delay and the quality of the valuation, or do not understand the terms and conditions. Some purchasers may ask a managing agent to forward a written settlement notice to the vendor, addressing instead of him on the vendor side the consequences of failed settlement. These vendors may face claims from their own vendor for failure to convey the property.
Real Estate Agents in Mumbai: Roles, Responsibilities, and Compensation
