Similarly to how one might expect a doctor to display his or her degree on the wall of their office, professional real estate agents should be more than willing to provide evidence of their credentials when doing business with you. If not, you might be dealing with a non-registered estate agent.
“Did you know that if your agent doesn’t have a valid Fidelity Fund Certificate (FFC), you don’t have to pay them a commission for selling your home? If an agent fails to produce an FFC that is still valid at the time when the commission is due, sellers can legally deny payment of the agent’s commission,” explains Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
Carrying this risk, one might think that the number of non-registered estate agents would be relatively low, right? Wrong. At the end of 2017, then EAAB spokeswoman announced that possibly around 50,000 estate agents were operating in the country without a valid FFC.
“Throughout last year, there was a call for the EAAB to clamp down on these illegally operating agents. Yet, the problem seems to persist, particularly in small towns such as Postmasburg in the Northern Cape and Hartbeespoort in the North West,” says Goslett.
But, apart from the possibility of saving money on commission, why should sellers care if their agent doesn’t have the necessary credentials? “Dealing with an estate agent who isn’t registered with the EAAB puts sellers at risk of working through somebody who may or may not be up to date with all the necessary requirements in handling property transactions. Part of being registered and having a valid licence with the EAAB means that you are earning enough CPD (continuing professional development) points and have passed your PDE (professional designation examination). This protects consumers against dealing with somebody who claims to have knowledge of the industry but doesn’t.”
What’s more, the money earned from the issuing of FFCs goes towards paying consumers damages for dishonest real estate agents who have stolen money from their clients. According to the EAAB, one of the purposes of the fund is: “To reimburse persons who have suffered financial loss as a result of theft of trust monies due to dealing with an estate agent”.
“Consequently, we encourage all sellers to enquire about their agent’s FFC. Not only will this protect them from working with somebody who is dishonest, but it also helps prevent others from being hard done by unregistered agents. If the agent in question is unable to produce a valid FFC, we further encourage sellers to report the agent to the EAAB by lodging a claim against them on the EAAB website,” Goslett concludes.