Why Investors Who Buy, Sell or Lease Properties Hire Estate Agents

Reasons for Hiring Estate Agents

Different investors have different reasons for engaging agents; often one investor says something that is the exact opposite from what others say. Even if the main reason for why investors are using agents varies, some of the reasons occur more often which are summarized below:

Increase Market Exposure and Create Competition
When a vendor engages a real estate agent, the agent’s task is to find the right purchaser for the property and brings him to the investors. According to some real estate actors, they use agents to reach out to a larger number of potential buyers in the market. Since the agents are expected to have their networks, contacts, channels to the market and knowledge about different investors, they can get a larger market exposure than the vendor himself can do. The vendor wants the agents‘connections on the right level; they can find him an investor he did not know was interested. In addition, when the properties are available in a larger market, competition is created and the vendor is expected to get a better price for his property.

View — Ibeju Lekki Properties

Network and Contact Establisher
Agents are not always used to reach out to a larger market; the vendor might already know whom he wants to see as the purchaser. Most of the time when the investors already have that sense for who would be interested in a certain property or they themselves want to buy a building not yet available on the market, it is the agents‘ contacts they covet. Phrases like, “agents are a necessary evil” were heard during interviews. Furthermore, the investors often use the agents to make the introduction and establish a contact with the purchaser, or more rarely, with the vendor. In this case, the agent is only paid for making the contact and may be cut out or the process in an early stage. The agent can also participate in the whole process, but the investors usually complete the deals themselves and the role of the agents is more like a lubricant and a messenger. Using the agent as a lubricant or messenger can be done for different purposes and at different times, for example to get the flow into the process or do the work as an intermediate if the situation heats up and then be a filter between the both parties. As the middle man, the agent can step in if there is a testy situation, trying to sort it out. It could be that one party is acting unrealistic, “the buyer and the purchaser must come to terms about the deal and that is the agent’s assignment”
First on an Investment Opportunity
The most common reason for appointing an agent is that the investors want the agents to come back to them with investment opportunities. By engaging agents for their sales – even when the investors can do the sales themselves and thereby paying the agents a fee, they try to make the agents think of them first, when they have investment opportunities next time. This is proactive work from the investors to be the first to know about an investment that is sought after.

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Own Resources
Some of the investors mentioned that they have the knowledge to sell their own properties but not always the needed resources at the time. Especially if properties are not their core business, they try to engage a real estate agent for sales and instead put their effort into finding new investments or focusing on the core business.

Type and Size of Property
We identified a pattern that it is more common to engage an agent when the property is more difficult to place because of its usage or location, for example odd industrial buildings. It is also more common with the use of agents when you have larger and more complex deals due to the fact that it is time consuming to find the right investor for such a deal.

See – LAND FOR SALE IN IBEJU LEKKI

More Drive in the Transaction Process
Another important and often mentioned reason is that the agents put more drive into the process; they have more ambition to carry out the deals and speed up the transaction process, the reason behind being their focus and interest in the deal. An investor may have too much work to handle and cannot make a full commitment and put 100 percent effort into the deal, and therefore choose to allow an agent to do it

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The need to overcome time and space limitation
One person may wish to perform several transactions at the same time. However, he could be in a position where he is unable to run these several activities by himself at one instance, for he is at one specific place (space) at one time. He cannot be at different places (spaces) at one instance (time); for this reason, he/ she may want another individual to act on his behalf. In this case the concept of representation comes into view. The inability of a person to be at different places at the same time can thus be solved by agency representation.

The need to overcome limitations of knowledge and skill
Performing one or more activities may demand certain skills or knowledge. Hence one may lack the required. Knowledge in performing a certain activity. Hence, another individual who has the required skill may act on behalf of the person who has no such expertise in performing the duty.

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The need to represent legal persons
Legal personality is endowed to non-living entities. Thus, after acquiring the legal personality these entities will have the right to exercise all activities that a legal person can do. For instance, they can sue and be sued, administer property etc, to conclude a valid contract and to transact with 3 “parties etc. However, these entities don’t have mental capabilities to analyze the cost and benefit of
their transaction because they don’t have minds like human beings. Hence, they need an agent to act on behalf of them. The manager of a business organization, for example, is considered as an agent through which any dealings with a third party is concluded.
From the above discussion, we can understand that an agent can act on representing legal persons to exercise rights and duties that a certain legal person enjoys. It is through the agent (human being) that a certain legal person enjoys its rights and performs its duties.

The Need to overcome incapacities
The Nigerian civil code provides that capacity is required in order to perform a juridical act. Certain category of people like minors (below the age of l8) and interdicted people cannot have the appropriate analytical capacity in order to enter into a juridical act. Hence they may fail to analyze the cost and benefits of the transaction. Hence someone else who can act on behalf of them is appointed.

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