Are agent fees a good deal for owners in gated estates?

News > news - 27 May 2008
The estate agency accreditation requirement in some upmarket residential estates is once again being called into question - even by agents who are currently accredited.

Johalna Minnaar, Gauteng North regional manager for the RealNet property group, says accreditation allowing an agent or agency to work on a particular estate is generally based on the payment of an "affiliation" fee - but that it is not clear how these fees are used to benefit residents.

Nor is it always clear whether residents are aware that they are limited to working only with the accredited agencies should they wish to sell their homes.

The fees charged can be quite hefty. At Woodhill near Pretoria, for example, they are currently R8000 a year per agency plus R3000 a year per agent whereas at The Wilds, they are R8000 once off per agency plus R3000 a year per agent. At Mooikloof, agents have to pay around R22 000 a year for the privilege of being allowed to market properties in the estate.

"We do have agents working in these estates," says Minnaar, "so it is not a case of sour grapes for us to question the practice of accreditation. And we do understand that homeowners' associations don't want their estates flooded with for-sale boards and showhouse visitors.

"But they are obviously collecting quite substantial sums of money from those agents who do work on their estates and we think residents should be better informed about how it is being spent. Many, in our experience, are not even aware of the fees being paid.

"Also, it must be said that the system of charging affiliation fees is chasing away many really capable agents who cannot or choose not to pay, and this quite naturally puts a limit on the resources and talents available to homeowners, and on their chances of selling their properties."

This is of particular concern, she says, in the current market, when properties need all the exposure they can get to potential buyers, especially if they are in the slow-moving big ticket category.

The Competition Commission recently reviewed the practice of agency accreditation in estates and decided it was not anti-competitive because other agents are still free to operate in the residential area surrounding a particular complex or estate.

However, notes Dr Willie Marais, national president of the Institute of Estate Agents, the commission did make the point that that accreditation of agents in this way must be completely transparent, with the accreditation criteria being explained to all interested parties and being subject to review at least annually.

"For example, all owners in the complex or estate must be aware that they may be limited to dealing with just one or two agents should they wish to sell their units, and not necessarily those agents they believe to have the best marketing skills or resources," he says.

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