Buying, selling or renting a property is one of the most important decisions any of us will ever make, and yet it’s easy to get swept up in the excitement of finding your dream home. Especially when researching properties online, many people focus on the looks of the property, the location and the price. These are all important factors, of course, but so too is the question of who the estate agent is – and whether can you trust them.
Beware of scammers
Unfortunately, property scams are all too common in SA, with would-be tenants especially handing over deposits and upfront rent payments to people posing as agents, only to find out that they were not acting for the real owners of the property. By the time the penny drops, the fake agent – and their money – are long gone, never to be heard from again.
Check who you’re dealing with
To avoid this sort of heartbreak and financial loss, our advice would be to always check that the agent you’re dealing with is a bona fide realtor. This is actually very easy to do, yet few people know how – or take the trouble to find out. And that’s despite the potential consequences.
If their name’s not down, walk away
In South Africa, estate agents are required to register with the Property Practitioners’ Regulatory Authority or PPRA. This involves a 12-month apprenticeship or learnership period at a registered estate agent, followed by passing their Professional Designation Exams (PDE).
Only then can a newly qualified estate agent earn their Fidelity Fund Certificate – the all-important FFC. This document, which must be renewed annually, allows estate agents to keep clients’ deposits or other funds in a trust account.
Who are you going to call?
In the event of a problem with the property purchase or rental transaction, the PPRA provides a measure of recourse in that you can get a refund of your deposit from them – but only if the agent in question is registered with the PPRA.
If you don’t believe, ask!
You should never feel awkward or embarrassed to ask to see an estate agent’s FFC certificate. Any legitimate agent will be more than happy to show you this; anyone who makes excuses should be red-flagged immediately. The FFC even has a tear-off section that agents can take to viewings. Bear in mind that annual renewals sometimes take time, and that your estate agent may genuinely be waiting for a new certificate. In this case, ask to see their FFC from the previous year instead.
Do your research
All legitimate agents are listed on the PPRA website (www.theppra.org.za) – you can search by either individual estate agent or by estate agency. We can’t stress enough that dealing with an unregistered agent can be very risky indeed. To give you an idea of the scale of the problem, a 2018 report found that there were some 50 000 unregistered estate agencies in South Africa, while more recent research suggested that 10 out of every 12 agents are unregistered.
Be a little wary of trainees
You may find yourself dealing with a trainee estate agent employed by a legitimate estate agent. This shouldn’t be a problem, but always check the details they give you for transferring your deposit. If it’s a private account rather than the agency’s trust account, that’s another red flag right there. In other words, always do your due diligence.
Buying direct from a developer
Today, many people are buying their properties directly from developers like Reeflords. In this case, the situation is a little different. New regulations require developers to register with the PPRA, but as these rules are not enforced, many are not registered and hence don’t possess an FFC.
This isn’t an issue, however, as instead of paying the deposit direct to the developer, you can (and should) pay it to the conveyancing attorney. All attorneys are required to be registered with the PPRA and to have a valid FFC certificate, which lets them keep the deposit in a trust account until the property is transferred and the developers have met all their obligations. In addition, attorneys are regulated by the Law Society of South Africa, giving you even more protection.
Conclusions
Given the potential consequences of dealing with a fraudulent or fake estate agent, and how easy it is to check if your estate agent is legitimate, it seems almost crazy not to verify them. For the sake of a few minutes’ of your time, you could save yourself a lot of trouble and money.
If you have questions about any of the topics discussed in this blog, email terry@reeflords.co.za or connect with us on our Facebook and LinkedIn pages – Reeflords Property Development. We’ll get back to you as soon as we can. Think Home, Think Reeflords.
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