What exactly is a sole mandate and why is it so popular?
When Private Property recently conducted a series of surveys, it became clear that agents not only favour sole mandate agreements with sellers, but that most properties listed on their books are sold using this method.
So what exactly is a sole mandate? The term is used when a seller allows only one agent to sell his home. The agency concerned will usually provide certain guarantees as to how the property will be marketed, how many show houses will be hosted, and how and when the property will be advertised.
Myles Wakefield, CEO of Wakefields Real Estate, says that sole mandates are worth every seller’s serious consideration. The benefits are numerous, with the most important points being your home’s security, agent accountability and increasing the potential of receiving the best possible offer, in the shortest period of time, from a pre-qualified buyer.
“Having one agent accountable for the marketing of a property ensures better customer service and feedback, and also ensures that all agreed marketing initiatives are followed within the stipulated timelines,” he says. He also notes that sole mandates enhance agent motivation and focus an agent’s attention at much higher levels than do properties that are secured with the more common open mandate method. And they remove any chance of a costly double commission claim.
Your agent should be knowledgeable
“Sellers should think carefully about to whom they give a sole mandate and ensure that they get maximum service and marketing mileage in return for the privilege,” he adds. What should sellers consider before agreeing to a sole mandate? Sellers should look for the real estate agency and agent with the highest level of property market knowledge in the area and be confident that the agent has a good database of clients, as well as a suitable marketing plan for the property, which should include advertising on online portals.
How much exposure the property will be given, be it in advertising, social media or other initiatives such as radio or special show days should also be assessed. It is also always a good idea to ask what advertising budget an agent or agency is prepared to put into marketing your property.
Sellers need to be careful of any property valuation which is strikingly higher than that provided by agents with proven track records in the area. Many an agent will promise more in terms of price than they are in fact able to deliver in order to persuade sellers to give them the sole mandate. The flattery may do wonders for the seller but ultimately a process of lower offers being received follows and then a request to lower the price to what would have been a more realistic sum in the first place. By this time, valuable marketing time has been lost and, when buyers see a price dropping, they are likely to push for an even greater reduction in price.