Sole Mandates, are they the right choice?
Could signing a sole mandate reduce your chances of finding a buyer in the shortest possible time at the best price? According to Campbell Property Group's CEO, Grant Campbell, while many sellers tend to shy away from sole mandates because they don't want to put all their eggs into one basket, signing a sole mandate could be far more beneficial to them then they think.
"Essentially a mandate is an exclusive contract between the seller and a real estate agent, allowing that agent to market that specific property and find the right buyer for the home at the highest price in the shortest period of time. It is also an agreement that gives the agent the right to deal with all the legalities that are involved in the property sales transaction explains Campbell.
He notes that when it comes to mandates, sellers have the option of either signing an open mandate or a sole mandate Campbell says that in the case of an open mandate, the seller has more than one agent - more than likely from different agencies - working on finding a buyer for the property. "Although an open mandate allows the seller to work with several agents and does not restrict them to only using one agency, it can bring about complications and there is always the chance of a possible double commission claim. While it may seem as though an open mandate is broadening the home's exposure to the market, it also widens the scope for confusion as to which agent was the effective cause of the sale," notes Campbell. "Although one agent may have signed the offer to purchase with the buyer, it may have been another agent's advertising and marketing that brought the buyer to the property in the first place."
A sole mandate option gives a specific agent the exclusive right to market and sell the property during a specified time frame. "During this time period the seller may not appoint another agent to market the property. If the seller is not satisfied with the selected agent, they may appoint another agent once the sole mandate period has elapsed. The owner is still entitled to sell the property themselves provided this has been confirmed in writing with the estate agency that has been awarded the sold mandate. "There may be a fee payable to the agent in the case where the homeowner does sell the property themselves;' says Campbell.
Sellers do have the option of giving the agent an exclusive sole mandate, which is essentially the same as a sole mandate. This is slightly more restrictive in that it precludes the homeowner from being able to sell the property. One of the optional terms of an exclusive sole mandate is that the seller may authorize the agent to accept or reject an offer on their behalf. "The concept of a sole mandate is to create efficiency and maximize the benefits to all those involved in the property transaction. It is for this reason that the majority of financial institutions and estate agencies will recommend that the seller has one in several benefits are created by a sole mandate, which will ensure more effective marketing of the property and an orderly conclusion of the sale. "A sole agent would be aware of any disclosures, which can be very difficult in the case of an open mandate," says Campbell.
He adds that logistically a sole mandate makes more sense in that the seller only has to liaise and deal with one agent opposed to several. This will simplify the process and far less time will be spent coordinating the seller's schedule with the various agents also better from a safety perspective to only have one agent that has access to the property.
According to Campbell, before a seller signs any mandate, they must know that they are working with the right agent for their needs. The seller should ensure that they choose a qualified agent with a valid Fidelity Fund Certificate (FFC). The agent must provide the seller with a marketing plan for their property. He notes that if at any stage during the process the agent is not following the marketing plan they have provided, the seller will have the right to cancel the mandate. Campbell says that it is vital that the agent works according to what is always within the seller's best interest, giving sound professional advice assisting the seller to make the right decisions, especially when multiple offers have been presented.
"Although sellers may be inclined to think that signing a sole mandate is putting all of their eggs into one basket, it is actually about allowing a reputable, experienced estate agent the opportunity to make the process of selling a home simpler. It ensures that an entire team within a real estate network is cooperating to sell the property within a reasonable time frame at the best possible price," Campbell concludes.
To find out more or to list with one of our professional agents, contact us today, or send us an online request for us to match you with an agent who specialises in your area - which you can do here https://www.campbellprop.co.za/list-your-property/
