UBERRIMAE FIDAE: AN ESTATE AGENT RESPONDS
By Abbe Karavitis
As a real estate agent in Makrigialos Crete, I can appreciate the views stated in last month’s issue of THE CRETAN GAZETTE in an article entitled Caveat Emptor! , and do agree with many of the writer’s points. I think that more estate agents have grown up in the last few years in Crete. I personally, have been in the business for over five years, but I can appreciate the validity of this statement, as Crete is a growing market.
The same can be said of Mallorca twenty years ago or Spain in the nineties. I do think that this is not a fashion grown purely within the last few years, but one borne through the changing face of tourism and increasing ease of travel.
Nevertheless, I did want to reply to some parts of the article. I felt that is was misleading to include an example of a customer meeting an owner of a property and dealing with the paperwork themselves.
This can be a very dangerous example to give. Estate agents have a duty to check to see that the property is free and clear of all titles and burdens and also to make sure that the customer is aware of what exactly he is purchasing ( Uberrimae Fidea ).
For the one example given, I can quote others of people doing the same thing and consequently discovering that the land was not freehold and that, if something destroyed their house, they would not be able to rebuild, as they did not own the land.
Often, people buying property from abroad have little idea how complex it can be to organise a house or a piece of land, with tax and other papers, before it is even legal to sell. An estate agent generally will have invested many months on clearing a property, which can be unpaid work, as an estate agent is paid once the contract is signed.
In the example given, it was stated that the couple in question had been looking for a property for two years. They had probably talked to many estate agents, who take the time to show them houses and properties, all of this ‘unpaid’ work.
When deciding to deal directly with the owner of a property, shown to them by an intermediary, they disregard their ethical and legal dealings with the estate agent.
They agreed a new price with the owner of the property ‘after a lot of raki’. This could mean that the owner changed his original price without the agent’s knowledge or a thousand other reasons, after a raki experience. Any owner that would knowingly sell a house to a customer, given to him by his agent, would need serious consideration as a trustworthy client.
There are a few questions that need to be asked, in answer to the example given in this article, such as:
- Perhaps the agent could be allowed to respond?
- Would the new buyers have found this property without the agents help?
- What about the ethical agreement made between the buyer and the estate agency. An agent is an intermediary, and in other countries, there are very hefty fines levied on those breaking a contract of sale, when an intermediary is involved.
- What about the estate agent’s agreement with the owner?
- What about the costs incurred by the agent for advertising, viewing and lost income?
Obviously if you have only bought one property you will have a simple approach to an agent’s wage, but as agents dealing with many different properties, I suggest potential buyers look at the information give on the Hellenic Real Estate Web site. www.sek.gr
The HAR states that:-
In Greece it is customary that both seller and buyer will contribute a commission payable to the real estate agent, for introducing the buyers to the owners.
The exact amount of this commission is a matter of agreement between the real estate agent and his clients . It is understood that the agent’s commission for his services, is due only in the event of a conclusive transaction.
This is not only legal for HAR members but all estate agents. The idea that there is a legally set commission rate for an estate agent is out of date and grossly misleading.
Also, to boldly state that it is easy to buy a house from a local, who may not speak your language, and to happily trip off and sign contracts, without understanding fully all the issues and with no comeback or insurance, I find to be a very sweeping statement and a worrying way to help future buyers.
In my opinion, one should understand the role of an estate agent . What is the job they are going to do for you and what, if any, is their ongoing role in your property purchase?
Firstly, it is vital to establish who you are dealing with, and for this I have devised a list of questions pertinent to all.
Obviously, choosing the correct agent is not purely a matter of buying a property. One should feel comfortable dealing with the agent and this is a purely personal choice.
- Being Greek is essential. First of all, in my opinion, they must be Greek. This, I feel, is absolutely essential. As an English woman living here for the last twelve years, I can just understand the complexities of Cretan laws, having run other businesses and studied in Spain and France . The anomalies alone are impossible to completely understand unless you are Greek.
- Make sure they are established. Do they belong to societies? Are they governed by a set of rules and ethics?
- Do they have an internet site? As most people deal with agents firstly through the web, make sure it a professionally run site, with constantly updated information and a monthly newsletter.
- Who are their other customers? Do they deal with locals and foreigners alike or just the English-speaking buyers? Do they sell a range of properties or just two or three houses?
- Are they registered and do they have a tax number within the country? This is vital for claims, tax and legality.
- Do they have a fully equipped office and information service?
Are they just running an outfit from their house, or are they are properly set-up company? Plush offices cost a lot more to run than just buying a glass or two of raki!
- Do they deal all over the island or concentrate in a particular area where they are based? Are they a small professional service or a large outfit with many offices across the island? What type of personal service do they offer?
- Do they offer building, maintenance, translation etc? What other services do you need? Are there after sales services available or do you just buy the property and that is the end of their involvement?
- Are they based in the country? Why would you buy a house from a company in a different country? I find that if you are not on site, you may be able to buy the house, but what about the future issues of maintenance and building?
I hope this has helped others to understand the role of a professional estate agent and to clear up the issues of commission and payment.
Good luck in any purchase and I wish everyone happiness in Crete. It is after all, a very magical island.