Understanding property industry terminology

What you may not know about property.

 

terminology Getting to grips with the terminology of properties

SERVITUDES

In some instances, when buying land or a built property, there may be a servitude present on the property you have bought.  The average property investor may not understand the nature and consequences of such servitudes in respect of their land.

 

As explained in a recent article by attorney firm MacRobert Incorporated, the general rule if a piece of land (blockland) is subdivided into more than one portion, is that the landlocked property/properties are automatically entitled to a right of way servitude over the adjoining subdivision in order to access a public road.

 

The caveat to this rule is that the property owner with the direct access to a public road may unilaterally alter the path of the right of way, provided that this does not amount to unreasonable conduct and does not prejudice the landlocked owners' common law right to access the public road.

 

Terminology Don't get confused with all the various terms and words

As Wendy Williams, a director of Engel & Völkers Southern Africa cautioned, always ensure that the wording in an Offer to Purchase is correct and protects your rights. Our trained Engel & Völkers' property sales advisors and their principals will be available to explain any vague or unclear clauses to you as part of our professional services.

 

MANDATES

A mandate means a written authority or permission given by a seller to a real estate agency, which instructs them in writing to sell their property. There are however, a few different types of mandates and we briefly explain the four most commonly used ones here below:

 

Sole/Exclusive - Only one agency has been awarded the exclusive rights to the marketing and selling of your property.

 

  • The seller agrees in writing that only one real estate agency only will market their property for a specified time - normally a 3 month period, in the current market. 
  • The seller's decision to accept the terms of an exclusive mandate would be based on the agent presenting a written CMA (Comparative Market Analysis) which gives accurate and comparable selling prices of properties sold and currently available in the immediate vicinity.  The agreed upon listing price should then be a realistic valuation and market-related, which should attract buyers as it is correctly priced. There must also be an agreed upon marketing plan to ensure that the property is correctly exposed to the market.
  • According to Craig Hutchison, CEO of Engel & Völkers Southern Africa 'Exclusive mandates provide many benefits to sellers. Within our national group of offices, a high percentage of properties listed on our books are sold using this exclusive mandate method and the highest price is almost always obtained due to the accurate information in the CMA. This increases the potential of receiving the best possible offer, in the shortest period of time, from a pre-qualified buyer.'
  • And, very importantly, an exclusive mandate removes any chance of a costly double commission claim.' Craig concluded.

 

Open - Any agency may market and sell your property on a first come, first serve basis.

 

Dual - Only 2 agencies are allowed to market and sell your property.

 

Shared - More than 2 agencies are allowed to market and sell your property exclusively.

 

terminology Unpacking the terminology of the property industry

There are indeed fewer benefits to the seller when awarding an Open, Dual or Shared Mandate because of the following reasons:

  • Property agents generally have many properties listed and therefore cannot give each property the attention or marketing budget they deserve.
  • Due to a large number of agents visiting your home, there is no privacy for the seller and the family.
  • Security of your home and its contents could be compromised by the many agents and potential buyer's walking through at inconvenient times.
  • Few of the potential buyers would have been pre-qualified.
  • Many For Sale boards erected outside your property make it appear as a desperate sale.
  • Due to the agents being busy marketing numerous other properties at the same time, they cannot provide regular written feedback to seller.

 

Whatever your decision on the type of Mandate, our property sales advisors at Engel & Völkers are well trained and disciplined to ensure you receive the best possible marketing tools and activities that your property deserves.  They will provide you with professional advice and guide you on the correct selling price, based on the various electronic platforms we use at all our offices.

 

The information and advice provided above does not constitute expert legal or financial advice.

These are purely practical guidelines so that those delving into the property industry may have an idea of what to expect.

Engel & Völkers

Fourways | Broadacres
1E Needwood House, Broadacres Shopping Centre, Broadacres
South Africa
South Africa
Phone
+27-11-465 0410

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