How to buy a home – Why you pay estate agent commission
How much do you really know about the home buying process? Sure, house hunting is fun and playing with online calculators does give you an idea of how much house you can afford. But what should you know before you even sign an offer to purchase?
8 Commission, building plans and FICA
Commission – liability
Estate agents today are well-qualified professionals. Needless to say you will expect the estate agent to be effective and professional. Bear in mind that the commission is their incentive and reward for their services.
Commission has given rise to many legal disputes between agencies and buyers. Please note the following: It may happen that more than one agent introduces you to the property that you eventually make an offer on. If a second or further agent introduces you to a property that you have already viewed through another agency, you must reveal this fact (preferably by email for record purposes) to both agencies.
Private sale – commission claim
Under no circumstances should you approach the seller directly with an offer after an agent has introduced you to the property. It is also not advisable to make use of friends, family or business partners to make the offer on your behalf. If the agency later learns that an offer was made to the seller directly, and in all probability they will, they can in certain circumstances claim the commission from you.
It is currently not a legal requirement that building plans should be in order before we can transfer the property. You can, however, visit the local authority’s building offices and go through the plans. In your offer you can also require that you have to be provided with the approved plans before registration.
FICA is an acronym for the Financial Intelligence Centres Act. The term FICA will frequently be used during the course of your transaction by us, the agent, bond originator, bank and the bond registration attorney.
This act compels nominated people and institutions involved in your transaction to verify certain information and keep records thereof. Regardless of how frustrating this may be, you must accept that all role players will require that you provide them with certain documents.
FICA also requires of us as attorneys to report any suspicious transactions, for example when large amounts in cash change hands. Any transaction which involves more than R25,000 cash must be reported by us to the FIC (Financial Intelligence Centre).
POPI is an acronym for the Protection of Personal Information Act. In terms of this act we need your consent to process your personal information (for example your identity number, contact details, email address). We will present this consent for your signature when you sign the transfer and/or bond documentation at our offices. Rest assured that we will only process your information for transfer, bond cancellation and/or bond related purposes and that we fully comply with the POPI Act.
Next time: What the transfer process looks like; and what you can do to ensure it runs smoothly