Only rarely do sellers of commercial properties appoint their agents on a sole mandate basis '“ but this is a big mistake, says Jason Lee, head of Rawson Properties new commercial property franchise division.
'In residential property marketing, sole mandates are recognised by many as being the only way to go if you are looking for really dedicated, hands on service,' says Lee, 'but this has seldom been the case in commercial property'
There is, he adds, a world of difference between the agent who simply puts a property on his stock list and then waits to match it with the occasional, vaguely interested enquirers looking to buy or rent in that area or at that price and the agent who actively markets a property spending time, effort and possibly money on promoting it.
'The second type of agent deserves and should be given a sole mandate,' says Lee.
The vast majority of SAs commercial agents, he said, do no more than perform an introductory role. Quite frequently the client does not even use their offer to purchase or lease agreements. This, says Lee, is why so often attractive, strategically placed premises in good condition and offered at competitive prices remain unsold or untenanted.
'I believe strongly that a property has to be 'worked', not just listed. It is this approach which separates the professionals from the also-rans.
'As a start, sellers of commercial properties must enquire whether the agent has the appropriate qualifications to sell or lease property as legislated.
'Without the NQF4 qualifications the agent is in fact operating illegally, unless he is still in his first year training period. This is today well understood in residential marketing but often overlooked in commercial property'
Sellers must also ensure that the commercial agent has a Fidelity Fund Certificate.
Some agents, added Lee, are using legal agreements that do not comply with the latest legislation '“ of which the agent himself is quite probably ignorant.
Commercial agents operating without sole mandates, says Lee, have an unfortunate tendency to accept the first tenant to come their way '“ or to back the first offer to buy '“ without seeing if they can do better.
'We have witnessed elsewhere a fair number of cases where a hastily chosen tenant has not only fallen behind on his rent payments but has also seriously devalued the property'
Properly trained commercial franchisees and agents, said Lee, undergo the same intensive introductory training that is obligatory in groups like Rawsons for residential agents '“ and then return regularly for update training.
'One noticeable advantage of this training,' he said, 'is that agents know how to give an accurate evaluation and will offer this to the client. Too many agents are unable to do this and therefore over or under-price the property '“ with disastrous consequences'
Good training, added Lee, will also make an agent aware of the full disclosures now required by the new Consumer Protection Act. Many commercial agents, he said, still operate as if the new Act was never legislated.
'All in all, therefore, there are sound arguments for handling commercial property on a sole mandate basis and for appointing properly trained agents. Those who have gone this route will in eight cases out of ten testify that they benefitted as a result,' says Lee.
In the first two months since its founding, Rawson Commercial has lined up eleven new franchisees, almost all of which will, says Lee, be operating by December.
'The uptake has been so good that we now expect to meet our target of having 30 commercial franchises up and running within two years, way ahead of the 36 month date set originally'
For further information contact Jason Lee on 021 658 7100 or email jason@rawsoncommercial.com.
