Should you just contract one real estate agency to help you with marketing and managing the sale of your property ‒ which is known as a sole mandate ‒ or is it better to enlist the services of multiple agents or agencies instead? There are obviously pros and cons to each approach and you’ll need to do your homework before deciding on the best tactic.
According to a Money Web article, the way you choose to sell your property will affect the fees you pay and the final price you receive, so it is important to understand the implications of each type of mandate, whether this is sole, joint or open. It’s also crucial to read through the terms of any mandate before signing. These terms should include the time period of your contract with an agency (this can be anything from one to three months or more), the attorney you’ll use (you’re not actually obliged to use the attorney linked to the agency) and the commission rate you’ll pay the agency after the sale.
The benefits of a sole mandate
The role of a Property Professional is to introduce your property to the right market to increase the likelihood of a sale. They also assist on all matters property related, whether this is a valuation on your property, property advice, talking you through the transfer process or assisting with your pre-qualification. What’s apparent from the onset is that, unless you are good at juggling multiple information sources at once, having more than one agency or property professional helping you through the process might become more confusing or time consuming than it’s worth.
According to Shaun Dubois, a Pietermaritzburg-based, Just Property Franchisee, a sole mandate should assure a seller that their best interests will be looked out for.
“A sole mandate allows us to allocate far more advertising budget to the sale, as we know we can take that risk because we will sell the property,” says Dubois.
“Instead of just any agents ‒ some of which the seller may not know or even trust ‒ trying to get the property as cheap as possible for their clients, we can look after the seller’s interests and assist them in securing as high a price as possible,” he adds.
The following are some additional reasons for considering a sole mandate:
- Streamlined communication (there’s only one point of contact for all feedback and information).
- One personalised marketing plan (your agent needs pull out all the stops if they are solely responsible for marketing and selling your property).
- Increased security and reduced admin (only one agent needs access to your property on show days, with only their appointment dates needing to be accommodated).
- Exclusivity (choosing one reputable agency to sell a property gives it a more exclusive and professional feel, more so than having multiple ‘For Sale’ signs cluttering your sidewalk).
Dubois also points to a recent court case, that went as far as the Supreme Court of Appeal, in which one agency successfully sued an owner for payment of double commission. “Had the owner elected to use only one company, under a sole or exclusive mandate, they would have been protected from this risk,” says Dubois.
Shared or open mandates
An open mandate means that you don’t have to sign a fixed-period contract with any agency and can approach many agencies to market your property for you. The agent that then secures a sale is the one who gets the commission off that sale. This could appeal to a seller who wants to ensure their property is being marketed as widely as possible.
Whether this type of mandate results in better marketing efforts from each agent, however, will be up to the agencies involved. An open mandate could be less of an incentive for an agent marketing your property, as there are no guarantees of their earning commission at the end of the day. Alternatively, adding a competitive edge to the mix could increase their efforts to ensure they make the sale.
A shared or joint mandate means that two or more agents from one agency are assigned to marketing and selling your property. These property professionals will then decide how to allocate responsibilities between themselves and the percentage of commission they are each to earn on completing of the sale. The amicability and success of such a contract really depends on how well agents work together and how fair they perceive the process to be.