Before appointing a Real Estate Agent

Before appointing a Real Estate Agent, it could be very beneficial to ask them a few questions before entering into an agreement.

Ask for a copy of their valid Fidelity Fund Certificate (FFC).

This is the Agent’s “license” to operate and therefore can ask a commission. Agents without a FFC are not registered with the Estate Agents Affairs Board (EAAB) and therefore operating illegal and are not entitle to any commission.

Tax registration


Ensure that you have the freedom to choose your own conveyancers. If you don’t have a conveyancers, ask the Real Estate Agent who they use.

Mandates – Many sellers are of the opinion that estate agents’ claims for commission arise from the deed of sale they signed. Although the clause with regard to the agent’s commission in the deed of sale, together with a possible agent’s commission addendum, regulates agents commission, the agent will still have a claim for commission even if the deed of sale does not contain a stipulation to this effect. This will be the case as the estate agent’s claim for commission is regulated by the common law principles of a so called contract of mandate.In the industry, this contract of mandate will usually be contained partly or fully in the so called mandate form, which the seller signs when he/she appoints the estate agent to market and sell the property. According to the common-law principles, there are no formal requirements for a contract of mandate, and therefore a seller may verbally grant a mandate to an agent. It obviously is bad business practice to enter into verbal agreements as this may present evidentiary problems for both the agent and the seller in proving the existence and ambit of the mandate. The common-law principles discussed above have been amended in the Code of Ethics of Estate Agents by stipulating that a sole mandate and an exclusive mandate (see below) must be in writing and must be signed by the seller. In practice, there are four types of mandate. We will not discuss the advantages and disadvantages of the various types of mandate as they are, for purposes hereof not relevant.

 Open mandate: In the case of an open mandate several agencies are authorised by the seller to market the property. The agent who is the effective cause of the sale will be entitled to commission.

Dual mandate: In this case, the seller authorizes a limited number of agencies (two or three) to sell the property. The agency who is the effective cause of the transaction will be entitled to commission.

Sole mandate: In the case of a sole mandate, the relevant agency and the seller agrees that the agency has the right to market the property to the exclusion of all other agencies. Due to the restrictive nature of a sole mandate, it usually is granted for a limited time only. Should the property be sold by another agency during this period, the seller will remain liable for paying commission to the sole mandatory.

Exclusive mandate: This type of mandate dictates that the property will be sold by the relevant agency only and exclusively within the time allowed. The seller therefore renounces the right to sell the property himself during the exclusive mandate period.

Finally, you should keep in mind that the Code of Ethics for Estate Agents contains further requirements, apart from the requirements that sole (and exclusive) mandates should be in writing and signed, for example that the mandate should include a marketing plan.

The relationship between agent and seller will also be affected by the Consumer Protection Act and the various mandates should therefore comply with the Act, for example, the requirement that the mandate should be drafted in plain language.

It is advisable to have your mandate scrutinized as it regulates the legal relationship between you and the agent.

  1. Offer to Purchase (OTP) – The offer to purchase which is made to you by the purchaser becomes the deed of sale once you have accepted it in writing. The deed of sale and legislation create the rules applicable to the transferring attorney when your property is transferred.It is imperative that you take note of certain key aspects listed here before accepting the offer to purchase. It is also of the utmost importance that you scrutinize the offer before you accept it. Rather be safe than sorry.
  2. Your next property –

You have to exercise caution in committing yourself contractually to the purchase of a new property before you have confirmed that the purchaser has indeed secured an approved loan. If you are going to purchase a new property it is advisable to make that offer to purchase subject to the successful sale and registration of your present property, regardless of whether the purchaser of your property has already successfully obtained a bond or not. If you want to make an offer to purchase a new property before the transfer of your property is finalised, it is very important that the conditions and timeframes in both transactions are aligned.