You’re selling your property. You’ve named your price and contacted an estate agency. Apart from the obvious details, one of the first things your agent will ask is: “Can we do a sole mandate?” You’ve heard the term before, of course, but how exactly does the process work?
A sole (aka: exclusive) mandate is given to just one agency and no other. Conversely, an open (ie: free-for-all) mandate goes to as many agencies as the seller wishes. Shared (joint) mandates are given to a couple of selected agencies, while network (multi-listing) mandates are given to one agency, which networks the property to other agencies.
A sole mandate offers the seller protection
So which is best? Ask any agent and they will invariably recommend that the sole mandate option really is the right way to go. They point out that a sole mandate protects the seller best because it is a contractual agreement between agent and seller. It ensures the agency’s commitment and guarantees a requisite level of service. The seller benefits from greater advertising exposure, more show days, increased marketing spend and a listing on the agency’s national and international database.
Without a sole mandate, a property quickly becomes over-exposed to many buyers. A sole mandate ensures exclusivity for the seller: the property is linked to one brand and sends a strong signal about quality to the marketplace. Agents take sole mandates very seriously, and will report back to their sellers regularly.
*Agents focus strongly on their sole mandates *
Many sellers believe that the more agencies they involve, the better chance of selling. Again, experienced property professionals say that this simply isn’t so. Agencies do not concentrate on marketing open stock; they focus strongly on their sole mandates. It’s a case of reciprocity – if a seller signs a sole mandate, the agent commits to a vigorous marketing plan to get the house sold. If a seller calls in all local agencies, they will simply list the property, but can’t offer the full spectrum of marketing benefits. The home can also be perceived in a negative light by buyers, because it will be seen as open to all, and perhaps even a forced or “distressed” sale.
Buyers like exclusivity
Industry statistics show that homes on sole mandate (which typically run for three to six months) achieve higher prices. Buyers like the notion of exclusivity; there’s a perception of quality. In an open market, agents simply run their buyers through the stock and try to close a deal as fast as possible. Open mandates can also render a seller vulnerable to double commission claims. If a property is priced correctly and managed properly under a sole mandate, it should sell. Furthermore, all parties are protected by solid legal contracts.
As one agent sums it up: “About 80 percent of our sales come from sole or joint sole mandates. The proof of the pudding is in the eating!”
*Written with the assistance of Carol Reynolds, area principal, Pam Golding Properties - Durban North
