DEPARTMENT OF PROPERTY STUDIES AND URBAN DESIGN

Name : BRIDGET MASHINGAIDZE

Student number : N0173160C
Program : BSc in Property Development and Estate Management
Course : Real Property Marketing
Course code : BLP 4205
Lecturer : Mr J. Mlotshwa

QUESTION
The sale of immovable property can be a difficult task for any non-rea estate
groomed person due to the jargon and various processes and procedures
involved (Kanokanga and Partners 2015). Discuss.
According to the Estate Agents Council of Zimbabwe (EAC), estate agents, lawyers and the property
owner are the only institutions and personals who are allowed to sale immovable properties in
Zimbabwe. The property owner can do so if he is willing to but he or she will definitely consult either
the estate agents or the lawyers so as to complete the process.

Immovable property is property that cannot be moved from one place to another. It is generally
connected the ground or land on which it sits. In much of the world’s civil law systems is the same as
“real property”; it is land or any permanent feature or structure above or below the surface.

According to Section 3(26) of the General Clauses Act, 1897, immovable property includes “land,
benefits to arise out of land and things attached to the earth or permanently fastened to anything
attached to the earth”.

Defining Estate Agents

Real estate agents are normally licensed to operate, negotiate, and arrange sales under the
supervision of a real estate broker and are licensed to help sellers sell and purchasers buy real
estate. Estate agents do bring together the buyers and sellers so that negotiations are handled and
the transactions are done in the rightful way following all the processes and procedures necessary.

From the onset it is prudent for a seller to engage a reputable estate agent. Before engaging an
estate agent, it is important to verify with the Estates Agents Council of Zimbabwe whether such an
agent is or would be registered. An Estate agent is a person or firm of persons who have an excellent
understanding of property markets inclusive of knowledge with respect to selling and or letting
(managing) of commercial, industrial or residential properties on behalf of individuals or corporates.
Estate agents negotiate on behalf of the seller with potential purchasers and also market the
property, arrange viewings and see to the signing of the Sale Agreement. Estate agents are usually
available throughout the entire process and assist both sellers and purchasers where need be. The
seller will be responsible for the payment of the Estate Agents Commission which unless the parties
agree otherwise is 5% of the purchase price of the property. Sellers can also sell their property
privately and attend to the process without the assistance of an Estate Agent thereby saving on
Estate Agents Commission.

Jargons which is not familiar to non-real estate persons

A property should have title and these titles usually come in three categories which are deeds,
council cession or developer cession. These jargons are not familiar to non-real estate people and it
will become a huge challenge for them to transact and sale properties without the help of estate
agents persons or the lawyers who know the law and the procedures.

A deed is a title given to property, it describes the whole property sitting on a piece of land and it
includes the names of the owners and the previous owners given that the property has been
transacted in more than one hands of owners. Deeds come in different types for instance deed of
grant, deed of transfer or parent deed. Parent deed is a deed which is of the overall piece of land
consisting of other pieces of land subdivided. When conducting a sale of such property with title
deeds, a deed search is a must before transacting or selling the property to a purchaser. Real estate
personals will have the knowledge of conducting these deeds search at the deeds offices located in
either the capital city Harare or the second city Bulawayo.

Moreover, another jargon which is not familiar to non-real estate persons is developer cession which
is another form of title of an immovable property. Developer cession is registered to the developers
of the land at which the immovable property is located at. Developers develop an area and if they
have not complied with the local council requirements, they will have to create their own list of the
property owners in that area so that when they complete, they can then pass the information to the
deed’s office. So, the estate agents will be familiar with such offices of the developers and before
selling a certain property they will have to check if the seller is registered at the offices of the
developer and if there are no any other part who purchased the same property. Therefore, any
persons who does not know how the real estate operates will not follow or the procedures of this
developer cession paperwork.

Furthermore, council cession is another form of title for immovable property. This title will be
registered to the local council of that area which the property is located. Non-real estate personals
do not understand how the council cession immovable properties are handled. Such properties must
be checked at their respective councils on all the issues for instance who is the owner of the
property so as to verify if the one claiming to sell the property is the registered owner of the
property. Other issues that can be checked include the council fees and all the bills of that property
and these should be cleared and most people who is not in the real estate sector are not aware of
such processes and procedures.

Besides the different titles of immovable properties there are other jargons which non-real estate
persons cannot understand for instance Comparable Market Analysis (CMA). A comparable market
study compares the prices of similar properties in the same region. A CMA may be used by either a
buyer or a seller to determine the worth of a property. After the real estate agents are given the
mandate to sell any immovable property, they will then carryout a proper research of the value of
that property by different methods of valuation which non-real estate personals are not aware of
and this include CMA. After the value is determined the next stage which real estate personal do
which is not in non-real estate personals knowledge is the marketing of the property so as to find a
purchaser of the property.

The process of advertising a property which is done by the estate agents is known as listing and non-
real estate persons are not aware of these as this should be done as per legal description. This real
estate jargon refers to a specific way of identifying and locating a piece of real estate that is
acceptable to a court of law. So non-real estate persons do not know any of such legal requirements
of the property for it to be listed.

Real estate persons will then advertise the property on different platforms which they know are
effective to target the rightful audience which purchases property and to their clients who purchases
such properties. Non-real estate persons will not have potential buyers of properties and will not
know how exactly to advertise properties. Real estate agents will advertise using different forms for
instance online using Classifieds and more websites which facilitates the sale of immovable
properties in Zimbabwe and which is also permissible according to the laws of EAC and REIZ.

When you have a buyer, who want to purchase the property the next stage which the non-real
estate personal is not aware of is inspection. Buyers hire a qualified professional inspector to
examine the house and write a report on its condition and any repairs that are required. The
inspection is usually included in the due diligence phase so that purchasers may decide whether they
want to buy a house as-is or ask the seller to do or pay for specific repairs.

After advertising the property and given that there is an interested buyer the next stage which the
non-real estate persons are aware but do not have all the information is viewing of the property by
the client or buyer. When viewing the property, the buyer should be given all the information
pertaining to the property and this include the total number of the rooms, the total area covered by
the property against the total area of the stand in square metres as well as the description of the
title of the properties as discussed above.

The next real estate procedure which the non-real estate persons are not aware of is the paperwork
which should be done after the buyer has liked and wants the property which is to fill in an offer
form. The offer form must be then taken to the seller and see if the offered amount for the property
is ok with him or her. Most of the person who are not from the real estate sector do not have the full
knowledge of how to draft an offer form or offer letter. Given that the seller accepts the amount
offered for the property the next process or procedure is of doing the paperwork up to the stage of
closure.

When you make an offer, the seller will ask for proof of money. If you're purchasing a home with a
mortgage, it demonstrates that you have the funds for a down payment and closing expenses. If
you're paying entirely in cash, your proof of funds verifies that you have the funds. Non-real estate
personals are not aware of such procedures like proof of funding. Proof of funds can be in form of
certified financial statements, online bank statements or any other proof which shows the
availability of the monies.

The insert below shows an example of offer form.

After the offer has been accepted there is another procedure which non-real estate personals are
not aware of is the Earnest Money Deposit (EMD). The initial monies that a buyer is required to put
down once a seller accepts the buyer's offer are known as an earnest money deposit (EMD),
sometimes known as a "good faith deposit." It demonstrates that the customer is not only serious
about purchasing, but also prepared to put their money where their mouth is. The EMD might be
anything from 1% to 5% of the total sales price. The EMD is usually kept by an escrow firm or as
specified in the purchase and selling agreement.

The first stage of the paperwork which the non-real estate persons are not aware of is due diligence
which is done with both the buyer and the seller. The buyer should be showed that the seller is the
owner of the property and that the papers are originals and this should be done in the respective
offices in accordance of the type of title of the property which is either deeds office or the cession
offices. If the property has full title deeds it should be checked if there are no any legal claims which
prevent the property form being transferred from one part to the other through sale for instance
liens.

Any person can petition to have a lien placed on someone's property if they owe you money or if
you have been awarded damages in a court case. This lien entitles you to money from the sale of the
other person's property. So, most of the non-real estate personals are not aware of such claims like
liens and if they proceed with the sale of that property later on one can come and claim money from
the purchaser which will be the new owner and he or she has the right to do so if there was a lien
registered against the property.

Furthermore, if the property is a deceased there is a procedure which non-real estate people are not
aware of and this is the process of registering the property to the high court and ensuring that the
executor of that property is given the right to sell the property and this is done by the real estate
agents in conjunction with the lawyers appointed by the beneficiaries of the so-called deceased. This
lawyer will then work with the real estate agents whom will have a buyer of the property. After the
high court notes that there is no any other interested part, they will then appoint the executor to the
deceased estate and this executor will sign all the necessary documents for the sale and the
proceeds must be then given to the beneficiaries of the deceased.

Moreover, if it is a deceased property there is a scenario where the deceased has a will and all the
beneficiaries will be inheriting the immovable property to be sold. In such cases there should be the
consent to sell from all the beneficiaries and this is used to see if all the beneficiaries are aware that
the property is on sale and that they are all agreeing to the amount offered. Therefore, non-real
estate person will not be able to know these documents known as the consent to sell and this will
make it difficult for them to sell the immovable property and they must consult real estate people
who have all the knowledge.

After due diligence there is an important stage which is done by the real estate agents and most of
the non-real estate persons cannot do is the drafting of the agreement of sale. The agreement of
sale is a document which should be signed by the sellers, buyers and witnesses of the transaction. It
constitutes of the full description of the property and all the conditions of the agreed points and this
will include the full amount of the property and if it is being purchased in terms it will state the
deposit, and how the balance is going to be settled. The agreement of sale will contain the full
names of the sellers and the purchasers which include their addresses, contact details and national
identification numbers. The will both sign as a way of showing that they are agreeing to the terms
noted above.

After the agreements of sale are signed the next procedure which non-real estate personals are not
aware of is the change of ownership. The change of ownership is done from the name of the seller
to the purchaser through the use of the final agreement of sale and this will have the full names of
the purchaser to whom the property is being transferred to. The real estate agents will then take the
agreement to be used for the change of ownership to the respective offices where the change of
ownership should be done. If the property is registered as cession either the agreement will be
submitted to the property’s file at the councils or at the developer offices.

The insert below shows an instance of agreement of sale.

Preparing The Transfer Documents

The conveyancer requests the required documentation from the seller and the purchaser, for
example, their identity documents, the original Title Deed etc. Once these documents have been
received the conveyancer can then draw up the transfer documents such as the Power of Attorney,
the Seller’s Declaration and the Purchaser’s Declaration where after the seller and purchaser will
sign the documents in the presence of the conveyancer.

Moreover, if the property has title deeds this means that the papers should be lodged to the deed’s
registry offices so that the change of ownership is done and this is known as conveyancing and this is
done by the lawyers who will be given the agreement of sale with the real estate agents personals.
The seller should fill in the Capital Gains Tax (CGT) clearance certificate. This form will be charged the
gain made by the seller to the Zimbabwe Revenue Authority (ZIMRA) as well as the Value Added Tax
(VAT). This is when the property is then changed to the purchaser’s names and the purchaser is
liable to the conveyancing fees that arise and the seller of the property must pay the VAT and the
CGT. This information will not be available to non-real estate personals who want to facilitate the
sale of immovable properties and if done wrongly this can result in legal actions and courts as it is
illegal to sell immovable property without the right to do so.

All these processes and procedures are known as closing. Once the property has been successfully
changed to the buyer’s name this is known as closing as the transaction will be done once the
property title has been changed to the purchaser’s name.

However, the sale of immovable properties cannot be a difficult task for non-real estate groomed
person due to the availability of different forms of advertisement which one can individually pay for
and sell a property. Some people know all the procedures and processes due to their previous
transactions meaning they are able to sell without any real estate agents.

Furthermore, some non-real estate personals can take advantage of the technology and get all the
processes of how to transact an immovable property online and they will be notified on how best
they can deal with it.

In conclusion, a non-real-estate person can find it difficult to facilitate the sale of immovable
property due to different jargons and procedures which they are not aware of for instance due
diligence and drafting agreements of sale as noted above.
References

Estate Agents (Professional Conduct) Rules (200/1987)

The Art of Selling Real Estate by Patricia Cliff

www.eac.co.zw

https://zimra.co.zw

Garay, U. “Real Estate as an Investment.” In Kazemi, H.; Black, K.; and D. Chambers (Editors),
Alternative Investments: CAIA Level II, Chapter 14, Wiley Finance, 3rd Edition, 2016, pp. 343-358.

Idzorek, T., M. Barad, and S. Meier. 2007. "Global Commercial Real Estate." Journal of Portfolio
Management 33 (5): 37-52.

National Association of Real Estate Investment Trusts. 2016. “REIT Industry Fact Sheet.” January.