Posted by: Martin | March 20, 2010

Further thoughts on Estate Agents

Given that there is a pool of buyers/prospective tenants that do not use the internet, the estate agents in Abidjan do actually add value to the sellers/landlords by providing access to these non-internet savvy buyers. They also add value to the seller by the traditional estate agent tasks of managing communications with all incoming prospective buyers/tenants and showing  the property.

For internet-using buyers such as myself it can be a bit annoying that it is the buyer that pays the estate agent. However, one way of looking at it, is that the fee to the agent is like a tax on a transaction akin to VAT, where the actual cost is shared by buyer and seller regardless of who pays the tax. In a low trust environment it might make sense that it is the party that has to bring up cash anyway that pays the agent.


Responses

  1. I think you should definately consider Abidjan as an extremely low trust environment, and all the more so if you are a foreigner. To me, it makes an aweful lot of sense that the agent is “for the Buyer” … who remains resident in the property he has purchased/let, rather than the seller, who can ‘skip’ the scene just as soon as the tranbsaction is completed.

    And hell, if you are going to pay something (tax, fee, commission, anyway, what does it matter who you pay it to, so long as it is to your advantage.

    I cannot understand this mentality “I don’t want to pay the Agent”, when there are rarely complaints when you pay a tax to the municipality, state, or what else!

    I have seen a number of people, primarily UN, who have been grateful to me for recommending an Agent, and those who regret not taking my advice and ‘going direct’

    Just accept the fact as part of the commercial culture, or go somewhere else which satisfies your ego

  2. I think the people in the UN you mention describe a situation where the agent really added value to the buyer – then it’s perfectly motivated to pay the agent. I am actually thinking that agents can add more value in Africa than in Europe for a western buyer, as a buyer needs more help with dealing with the local way of doing business.

    In my previous post I described a situation when I rented an apartment for less than a month, and the only thing the agent did was to drive me to the right location. He then proposed a price that was too high which destroyed value more than anything. I am not sure how even a good agent could have added value in this situation.

    However, for buying properties I am actually using an agent. It’s mostly because he finds deals that are not advertised online, and maybe also to ensure that the transaction works fine.

    So the conclusion here is that agents can add value for buyers, but less so for short term renters (unless they don’t know Abidjan or West Africa very well).

    The main issue with these posts is that the market is working significantly differently in Abidjan compared to Europe in that the agents are paid by the buyers, and it’s interesting and useful to try to figure out why.

  3. Well, for a start, Abidjan is not Amsterdam or Arles, or Aberdeen … it is in Africa. And I was under the impression that the same practice operates in France, or maybe it has changed since I lived there in the 80s


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