LISTING A PROPERTY
At every moment in time, there is an owner who is desirous to sell his/her property. The desire for sale can arise for reasons as: Resale at profit, Potential investment opportunities, emergencies and financial difficulties amongst others. Emergencies, crisis, wars and insecurities can send properties to the market at prices three times less their average market prices. Conversely, properties in areas considered to be secured can be seen to list at prices almost five times their average market price. This puts some property owners at the top of their game while others must seek refinancing in order to acquire a new property.
What is listing?
This is act of putting out information about a property for sale. It entails the use of communication channels at ones disposal such as placards, posters, sign boards, radio announcements, social media, to give out information about a property for sale.
Who can list a property?
A property can be listed directly by the owners or assisted by relatives, neighbours, friends and colleagues through verbal communication of their desire to sell. This is often done with small properties and those whose owners are not in a haste to sell. On the other hand, properties can be listed by middlemen known as brokers/agents.
- FOR SALE BY OWNERS (FSBO) LISTING
With this method of listing, property owners put up placards and give out words to neighbours and friend on the availability of his property for sale. Nowadays, you will find such listings on Instagram, WhatsApp Status, Facebook feeds and Story. Interested persons will contact the seller directly or through his close neighbours, schedule a viewing session or site visitation. This form of listing is often very limited as it only mostly targets only members of the immediate community.
- Direct contact with buyers: This method permits the seller to meet potential buyers directly. All material information is communicated on first hand basis.
- Quick sales: Although this point is debatable, if serious potential buyers come knocking, and depending on the pressure to sell, Cash deposit for a portion and forward payments for the rest are often very possible in the shortest time possible. This so because sellers are often hesitant to sell on basis of forward payment when listing through agent as the later will require their commission once a dime is paid.
- No commission paid: FSBO listings benefit the seller as he gains 100% of sales value. This is so because he represents himself as the seller and agent.
- Limited Publicity: This single factor spell out the relevance of a real estate agent in buying or selling a property. Less publicity in itself has the following negative effects:
- Limited offers and counter offers: Very low information circulation means very few persons will know about your property and thus limit the number of offers and counter offers received.
- Slow/delayed sales: Most FSBO properties take long to sell. This is as a result low publicity. Seasoned Brokers have hundreds of channels to communicate market information.
- Low Sales Values: With low publicity and no knowledge of the market, most FSBO properties list at very low prices. Buyers often get the best out of such deals as they use the seller’s ignorance of the market against them.
- Personal Insecurity: Most FSBO properties sold often put the seller’s safety at risk before, during and after sales. This is so as a result of;
- Disclosure of Personal contact: Advertising on individual basis means giving out your phone number on the streets. This attracts all sorts of persons including scammers, thieves, kidnappers and other men of ill will who may take advantage of such information and hurt your family.
- Jealousy: This is because most neighbours, relatives and friends are aware of their intentions. Closing deals in person often attract thieves and ill will neighbours who could harm or kill to seize the earnings from such sales.
- REAL ESTATE AGENCY LISTINGS
These forms of listing emphasises the role of middlemen in the purchase or sales of real estate property. Real estate agents/brokers put their talents to the test to outsmart competitors to bring the ideal buyers for properties. The following forms are practised in Cameroon:
- OPEN LISTING: With this method of listing, the owner consults many brokers/agents (locally called Demarches) to assist in the sale of the property. No preferential rights are given to any middleman as they most compete to bring buyers. The agent who brings a buyer that can offer a price acceptable by the seller on time earns a commission while the others are left without any pay. In most cases, if the seller finds a buyer before the agents, no agent is paid. The unique advantages for this method is evaluated from the view of the seller:
- He can still sell and walk off without paying commissions
- He gets a wider publicity and market information without any cost as brokers compete to win buyers and his approval.
Some Disadvantages could include:
- Decrease in interest to advertise/sell by brokers: The thought of working tirelessly without pay to loss to another agent who may just walk in with the right buyer is a great disincentive to brokers. They probably will just walk off to avoid such stress.
- Personal problems and enmity: Open listings often end up in strive amongst agents and sellers as unsatisfied agents may protest their neglect and isolation during the closure of such deals. Some go as far as accusing the seller for double crossing. These conflicts can lead to long lasting enmity and other acts of violence.
- EXCLUSIVE LISTING: With this option, a Single broker/agent is given the exclusive right to advertise, accept offers and counter offers, close up the sales and witness the seller. This agent may then hire other middlemen who are accountable to him. In most cases, the seller cannot sell the property without the consent of the Agent except otherwise mentioned in their agreement. Property owners agree to pay a fixed sum to the agent should in case they find a buyer themselves or if they decide not to sell again. This method benefits the agent/broker most as he has the rights over such properties. However, if the Broker has a reputation and experience, the seller benefits from the following:
- High sales value: An experienced agent will sell your property at very competitive prices.
- Targeted Publicity: Experienced brokers or those with longevity in their practice have an extensive database of potential buyers who most often are ready to buy. This gives the property owner the option to sell within the shortest time possible.
- NET LISTING: In this method, seller and the agent(s) come to an agreement (usually verbal) on a least or net amount needed by the seller; the agent can then sell the property for as high as he can above the net price and walks off with the difference. Here, the commission formula is: Commission = Actual Sales – Least Price Demanded.
This method is predominantly the most widely used form of listing agreements in Cameroon. This method is however illegal in most states of the United States. The Agent benefits most from this method although a few cases could prove the contrary. It is often seen that agents manipulate sellers to get properties at very low prices and sometimes sell for twice of trice such prices. This often breaths contempt as sellers feel played or cheated/scammed by the agent as some agents walk of such deals with commissions sometimes as high as the seller’s share.
The socio-political crisis has seen so many properties in the market as a result of financial difficulties and insecurity. Whatsoever the motive for sale maybe, considering a listing plan that guarantees a wide publicity, quality offers and the possibility of walking off with a fair share (fair share = Cash price – (Commissions paid + other closing costs) should be of the utmost considerations.