What are the benefits of signing a sole mandate?
Category Advice
What are the benefits of signing a sole mandate?
Many homeowners feel that if they let multiple agencies market their home, they will increase their reach to potential buyers which will enable them to sell quicker. The truth is that it is often far more effective to sign a sole mandate and allow one agent the space to secure the best sale.
For those who are unfamiliar with the term, a sole mandate is an exclusive contract that stipulates an allotted time-frame during which you may not appoint another agent to market your property.
If you opt for an open mandate, you're taking exclusivity out of the deal completely. This means that there will be multiple agents, from a variety of agencies, who will be marketing and trying to sell your property. This why you will see multiple listings grouped together, when you click on a particular property listed with more than one estate agent, on Property24.
"You can appoint another agent only once the sole mandate has elapsed. You will still be entitled to market and sell the property yourself, but only if this is confirmed in writing and you may still be required to pay a fee to the sole mandated agent. Giving an agent an exclusive sole mandate, on the other hand, means that you will not be allowed to sell the property privately," says Regional Director and CEO of RE/MAX of Southern Africa, Adrian Goslett.
It is important to check the wording of your sole mandate contract to avoid having to pay unexpected fees though.
Avoid a double commission claim
"Although this may sound like the option that will better your chances of finding a buyer, it can bring about complications and increase the chance of a possible double commission claim. An open mandate allows for a wider net to be cast, however, doing so also opens the potential for confusion as to which agent was the effective cause of the successful sale," Goslett cautions.
Beyond this, open mandates are often verbal agreements where a sole mandate is a written agreement. With no written agreement in place, Goslett warns that certain aspects could be misinterpreted, which could cause conflict. A clear, written contract protects both you and the agent, reducing the risk of any misunderstandings.
"A written contract will also ensure that the agent puts maximum effort into fulfilling the goals that have been set. If an agent is working on an open mandate, they may be less inclined to spend as much time marketing the property, which will reduce your home's chances of selling," says Goslett.
Avoid the over-evaluation
Lanice Steward, head of training for Pam Golding Properties says, "Some sellers believe that the more agents they have working on their property, the higher their chance of selling the property, quickly. The fact is, there is only one pool of buyers searching for property and if your property is priced correctly, the buyer will invariably end up with your chosen agent."
"Unfortunately, some agents will over-value properties in order to get an exclusive mandate. If you have been presented with two or more radically different prices from agents, interrogate them on how they reached that price - because, usually, one of them is wrong."
Find out how they obtained their market condition information, says Steward.
"Also, remember that there is an obligation for a buyer to use the first agent with whom they see a property, however, buyers go out with as many agents as they can. Regrettably, there are agents who will discourage a buyer who is keen on a property simply because they weren't the first to show it to them."
Restricting vs simpler selling process
Logistically, a sole mandate will also take up less of your time because you will only have to liaise and deal with one agent, not several. This simplifies the process, with far less time spent coordinating your schedule with the various agents and their buyers. It is also better from a safety perspective, as only one agent will have access to your property.
"While you might be inclined to think that signing a sole mandate is restricting, it is an opportunity to make the process of selling your home simpler. Before signing any mandate, take time to find an experienced real estate practitioner who will work according to what is in your best interest, giving sound professional advice and assisting you to make the right decisions," says Goslett.
What's the agent's in-depth strategy?
Steward adds, "Ask your potential agent if the company's marketing decisions and methods are driven by data e.g. can they provide personalised knowledge about your property and area? Do they have in-depth strategies regarding today's digital journey for marketing a property? Are their offices and agents connected through a referral system that might benefit you?"
Ideally, she says the exclusivity of the relationship allows the seller to hold the agent fully accountable for results and also, in the process, gives both parties the time to agree to any changes to the marketing and pricing strategy.
Author: P24
