July 19 2019
Sales staff in real estate, we find, do not really pay particular attention to educate themselves and to become professionals at the level that we wish to see.
There are something like 400 registered estate agents around, plus another 270 assistant agents who are allowed to be involved in sales. Bearing in mind that only registered estate agents/assistant agents can sell, as well as the owners of a property, the agents must be well educated on the subject.
The level of knowledge of real estate agents is not what it should be and most of them (we will guess around 70%) know the basics with most important details left out and the potential buyer/seller who places a trust on them may find difficulties during and after a sale. In a recent case of ours, after 38 years of experience and numerous instructive memos, lectures etc, we let a flat for 6 months by sales person, but who entered into a contract without 2 witnesses per party (4 in total). End result the contract is not valid and in order to avoid problems we did not charge our usual fee (less than 12 months lease, requires 2+2 witnesses).
On another occasion a client (not ours) was “promised” by the agent (not ours) that he can build on an agricultural plot of land. The potential buyer came to us for advice and we told him otherwise. A deal of €300.000 fell through and we have the other agent and the seller blaming us for it. Yet upon our encouragement and having visited the Planning Office the Buyer was informed that he will need a “deviation” from the zone in order to build (a never ending procedure of a doubtful success).
Others and including developers eager to sell permanent residency visas, declare that permanent residency visa holders can travel in all E.U. countries without visa. This is wrong. Visas for E.U. countries will be still required.
On another occasion estate agents registered as such, can charge a sales commission up to 3% (+VAT) on the sales price. Yes they can go higher provided there is a written agreement between the seller and the agent. If an agent is not a registered one, any level of commission is not acceptable (illegal), neither is tax deductible by the Cyprus Tax Authorities.
These and others are the simple things in life and it gets more complicated and difficult when you start being involved into more complicated matters you will be amazed to find out what some agents will come up with and the misinformation that a buyer/seller gets.
Some agencies have sales staff based on no salary and a 50% commission with all sales expenses being charged to the sales staff. End result is “who cares” and with a large percentage of turn-around of staff with constant newcomers with no/little knowledge.
Basic knowledge for the sales staff is a must as is the supervisors higher level of knowledge. Recent examples is VAT (of 19%) when it is charged on land. If for example a plot of land has a building on, it may not be subject to VAT. This is so, provided that the building density of the building (based on the prevailing zones) is more than 10% than the plot/property density is allowed. Did you know about this? If less than 10% VAT is applicable.
On the subject of house/building insurance, Insurance Cos “tricks” have been reported in our two previous articles, whereas the troublesome common expenses bills and the project administration is a case in hand to note.
Estate agents should make clear to the buyer whether a property has a title or not, since this is of a major importance, (if not available and depending on the circumstances of the non-issue the sellers may lose a sale).
If a comprehensive development project with common expenses etc sales staff is recommended to examine the status of the balance sheet of the project and of course to have comments on the general agreement. Does everybody bother?
If we come back to the visa/passports, the parameters are changing as are the requirements of securing them. For this reason sales staff must be kept constantly updated.
These and other matters are of major importance and which may be left behind by some agents and for this reason our Office has recently extended its education program by introducing a series of seminars regarding real estate details and including the matter of the statutory tenancy, common expenses regulations, the buildings insurance etc etc (ALA Academy).
The lack of education and correct or not presentation is not a Cyprus phenomenon and it happens to all countries, including the U.K., where a client of ours who bought an apartment at central London, he found out that there was another person living there under a previous sales contract (not common mind you and we suspect that our client did not follow the due diligence procedures), whereas getting an eviction/repossession of real estate, for non-paying tenants in U.K., it takes time from 3-12 months (non-payers abusing the U.K. court system).
At this point of time and with market moving upwards for urban properties, matters get a bit lose and the exercise of more strict control on the sales process became more important.