Real estate agents are very important when buying, selling or renting a house in Nigeria or any other place at all. Their place in the successful buying or selling of a property cannot be overemphasized. However, it is equally important to understand that not all estate agents are for you. The way to know the right agent to work with/for you is to ask vital questions that will determine this. A few questions will be highlighted below but before that, here’s the meaning of a “Real Estate Agent”:
An estate agent is a person or business that arranges the selling, renting, or management of properties and other buildings.
Sometimes, people need to sell their houses for reasons varying from relocation to change of vicinity taste and even if they put up a signpost announcing the sale, there’s a very low chance of getting a buyer that way. A real estate agent therefore serves as a middleman between the buyer and the seller.
He is bound to know more potential buyers to connect with the seller. This is because both buyers and sellers contact him frequently, asking for his service. There is therefore no better channel to buy, sell or rent a property other than hiring a real estate agent. In hiring an agent, you must understand that you’re hiring a partner who you must trust with details concerning your property. Asking the following questions will help you know who you should trust with your property:
What’s Your Price/Percentage Gain?
Although this is not a question that should come first, it is a very important question that determines a lot of things in your endeavors with your agent. Whether you’re renting, selling or buying, the price of your agent is a determining factor in your work relationship. The reason why this should not come first is because you should not be looking for the cheapest agent around. Not everyone who has a real estate firm is very much up to the task.
Before asking for the price, get to know if he/she is up to the task first. In the later parts of this article, you will understand how to do that. After confirming that you can work with a real estate agent, you must then bargain for price. Estate agents usually charge a percentage fee which can be between 0.75% and 3.5% of the agreed selling price of your property.
For rents in Nigeria, it is no news that “agency and agreement” fees are added to the rental fees for an apartment in the first year. People who have experience with Nigerian agents for rents revealed that sometimes, these agency fees can be the exact amount of the apartment/room they are renting.
This happens mostly for extremely small apartments like one room apartments or one room self-contain apartments. This means that a person would pay twice the rental fee for the first year before paying the original rental fee the next year without the agent and agreement fees.
Some agents do not charge the exact amount; some charge less and some charge more. It is expedient to get to know the price before deciding to work with an agent to buy, sell or rent an apartment.
What Are All The Costs?
You need to know if there are any additional costs. You need to get a breakdown of all the costs. A professional agent will naturally give you a breakdown but in case he doesn’t, you need to ask for it. When renting an apartment in Nigeria, don’t just accept the “agent and agreement” fees as N30,000. Ask for a breakdown of that amount. What does it entail? You have a right to know these things.
When selling a property too, you need to know if there are additional costs like “Professional photos, floorplans or any other marketing or legal costs that may apply according to the laws of the country.
Some real estate agents will take advantage of ignorant clients by simply stating the agency fees before they’ve been hired and bring up other unknown costs after they must have secured the job. Try not to be the ignorant client who will be boxed up in many other unplanned costs because you did not know the right questions to ask.
What Type of Contract Do You Use?
There are different types of contract and each contract has its own benefits and disadvantages, so it is important to know the type of contract that best suites you even before the arrival of your agent. Here are the types of contract to consider:
Sole selling rights – If your contract gives the agent “sole selling rights”, then it means the estate agent in the contract is the only one allowed to sell your home during the period stipulated. And even if you find your own buyer, you will still have to pay that estate agent.
Ready, willing and able purchaser – This means you have to pay the agent for finding a buyer, even if you decide not to sell to that buyer or you change your mind on selling your property.
Multi agency – This type of contract allows you to use as many agents as you like and only pay commission to the one who sells your property. The more agents you get to work for you, the more potential buyers you will reach. This also means you get higher offers – but you will pay higher fees.
Sole agency – This is the same as sole selling but if you find your own buyer, you won’t have to pay anything to the estate agent.
Most estate agents will be on a no sale, no fee basis, so they are only paid if they successfully sell your home.
How Do You Intend To Market My Property?
This is where estate agents demonstrate their experience and knowledge. If you want to sell your house, you deserve to know your agent’s plan for marketing your home. Ask them what’s most effective when selling houses like yours (the vicinity, property type, e.t.c).
Does Your Contract Include a Tie-in Period?
A tie-in period is the minimum time you must allow an agent to market your house before the agreement can be ended. This could be anything from 8-16 weeks. Many estate agents include a tie-in period. But if you become unhappy with their service, you may decide to terminate the contract.
So, you have to ensure your contract gives you the flexibility to terminate the contract without incurring a penalty (no withdrawal fee), and go elsewhere if you’re unhappy with your agent. You should check the tie-in period and negotiate this as well. You should not be locked in for more than 12 weeks (including your notice period).
Finally, before working with any estate agent, you need to ensure you get more knowledge on what you’re about to do so that your ignorance is not taken advantage of. If you are unable to get knowledge on this, the right and wise thing to do is to involve a trusted friend or family member in your endeavors with your agent.
Also, check your contract well before signing it. It is not a document to be signed hastily.