If you ask any estate agent what the best way to sell your home is, they will tell you that the quickest, most effective way is to give the agency a sole mandate. Ask a couple of friends and they will tell you to give it to as many agencies as possible in order for the home to receive the most exposure. So which is the best way to sell your home? Well, it depends on a number of things.
It is important to understand what a sole mandate is as many sellers don’t fully grasp what the implications are once an agency has been solely mandated to sell a property.
As the appellation suggests, when a seller signs a sole mandate, he agrees to allow only one agency to market and sell his property for a fixed period of time. The seller would be liable to pay this agency commission even if a buyer walked in off the street and agreed to buy the home without the intervention of an agent. If the seller chose to bring in another agent during the period of the sole mandate and the property was sold, he could be liable for both the commission of the agency which held the sole mandate as well as for the agent who sold the home. A sole mandate locks the seller into using a particular agency for a particular length of time.
A recent survey conducted by Columinate, on behalf of Private Property, revealed that most agents prefer working with sellers who have signed a sole mandate. Of those polled, 73 percent believed that it was more beneficial to the seller, as the sole mandate route allowed for a better chance of a sale. On average, individual agents reported that 48 percent of their cumulative sales were due to sole mandates.
So why are the stats so high and why do agents seemingly sell more property under a sole mandate? It boils down to having a vested interest in the property. It is highly unlikely that an agency is going to be willing to go all out to market a home that they themselves believe has little chance of selling.
Effective marketing costs a great deal in both time and money. There are very few, if any, agents in the current market who are going to risk spending large sums of money and much of their valuable time on a property that they believe has little or no chance of being sold in a relatively short period of time.
However, this picture changes somewhat when a seller who has heeded the agent's advice on pricing puts their trust in one agency. It would be fair to say that the main reason sole mandated properties tend to sell faster is due to the commitment shown by the agent and agency concerned. Sole mandates tend to put staff on high alert and everyone, from the receptionist to the agents, understands the need to push the property as much as possible.
These properties score on all fronts and will be punted across the board. Agencies may never admit to this, but it stands to reason that sole mandates are going to be shown to prospective buyers first and are going to receive the lion's share of any marketing campaign.
With all this in mind, it is very important for sellers to choose the right agency to market their home under a sole mandate. The following needs to be ascertained in writing before agreeing to allow one agency to market your home.
• How long will the sole mandate agreement run?
• What commission will be charged?
• How will the property be advertised?
• What websites/publications will be used to advertise the property?
• Will the property be placed on show, and if so, how many times?
• What success rate does the agency have selling sole mandated properties?
It is absolutely vital to choose an agency that is going to market your property in the best possible way in order for it to be sold in the shortest possible time. Price is always key, but more so during a slump. It is highly advisable for sellers to avoid dealing with agents who cannot back up their valuations with concrete evidence, particularly when a sole mandate agreement is being discussed. This is a not pie in the sky exercise, there are ways of ascertaining how much the property is worth. Work with an agency that can put its money where its mouth is and which can sell the property at the right price in the shortest possible time.
Is it safe to have all your eggs in one basket?
