“The glue of life”
Category Blog
“The foundational principle that holds all relationships”. That is how American author, educator and businessman Stephen Richards Covey has defined trust. Unfortunately, the glue of trust in South Africa has become unstuck’. Any glimmer of doubt about that will have been extinguished by the recent report on corruption and ‘state capture’ by the SA Council of Churches (SACC) and the “How South Africa Is Being Stolen” report by university researchers.
The disunity which bubbled up at the ANC’s national executive committee (NEC) in Tshwane last weekend clearly added further substance to the notion. And now the constant flow into the public domain of the leaked “Gupta’s emails” is maintaining the momentum. As a nation, we are today living under a constant cloud of distrust. It has built up on the back of the rampant corruption and ill-discipline that has clearly taken hold nationwide during the current term of incumbent political leadership and administration.
It is an issue that has not only dampened the national psyche. It is also undermining sentiment in the residential property market countrywide. The thin element of trust between home sellers and agents in shared (open) mandates is generally little more than a dab of glue. When a transaction is closed on this basis, it is almost inevitably based on the highest (but certainly not the best achievable) price put on the table by one of multitude of competing agents.
Conversely, in a sole mandate relationship – which remains by far the most effective route to market – trust has superglue impact on forgoing, and holding together, best-outcome sales. And not least so in the challenging marketing conditions that currently prevail.
The question, therefore, is: Why are sellers becoming less and less willing to sell their homes on sole mandate? I believe it is linked to the societal distrust that has taken hold in South Africa. People no longer trust each other. They know that what is promised is not necessarily what will be delivered.
Trust is Essential
The perennial problem with open mandates – particularly in the bearish market conditions that currently prevail – is that an agent cannot draw a line in the sand on price. If an agent does happen to do so, the buyer will simply seek out an alternative agent who is prepared to carry his or her offer to the seller without questions – albeit at a low price. A mediocre agent would almost certainly be willing to do so. This leads to negotiations starting off at a low level, which makes it extremely difficult for the agent to secure a fair price, let alone a good price.
Author: Ronald Ennik
