Generally speaking, when placing a house on the market, a seller will want to “move” it as quickly and profitably as possible. Agent mandates – which vary – play a crucial role in this regard.
The following mandate options are available:
Sole mandate: A sole mandate is a legal agreement entered into between a seller and an estate agency in terms of which the seller grants the agency the exclusive right to market and sell the property within a defined period of time (usually three months) subject to various terms and conditions
Open mandate: Any agent may market and sell the property on a first come, first serve basis
Dual mandate: Only two agencies are allowed to market and sell the property
Shared mandate: More than two agencies are allowed to market and sell the property exclusively
But which mandate is best?
According to the majority of estate agencies, property owners initially often opt for an open mandate when marketing their homes in the belief that the more agents are involved, the quicker the house will sell. While there may initially be more feet through the door, open mandates tend to backfire. Here’s why:
Few potential buyers will have been pre-qualified
Numerous “For Sale” boards outside your property smack of desperation
There is little control over how your property will be marketed. For instance, potential buyers may notice that the property is marketed at different prices with different agents, which may prompt them to hold back in anticipation of picking up a bargain
Open mandates expose sellers to the risk of paying double commission. When agents deal with the same buyer and one agent closes the deal, the other agent may claim against the seller for initially introducing the buyer to the property
Time and time again it has been proven that properties on open mandate sell below market value.
Commenting on the benefits of sole mandates, Craig Hutchison, CEO of Engel & Völkers Southern Africa, said: “Within our national group of offices, a high percentage of properties listed on our books are sold using the exclusive mandate method and the highest price is almost always obtained due to the accurate information provided by a comparative market analysis. This increases the potential of receiving the best possible offer, in the shortest period of time, from a pre-qualified buyer.”
Ultimately the decision as to which mandate to use lies with you – the seller. In this case though, it would seem that less is definitely more.