In a buyers’ market, sellers need every advantage to conclude a successful sale – like signing a sole mandate to ensure that their property gets the maximum attention
WORDS: MARANA BRAND – IMAGES: SHUTTERSTOCK
Many sellers falsely believe that if they let multiple agencies market their home, they’ll increase their reach to potential buyers, enabling them to sell quicker.
Having a number of real estate agents working on the same property for sale, however, doesn’t mean more buyers for your property. “The truth is that in any town, at any time, there’s only one pool of buyers searching for property. If your property is priced correctly, the buyer will invariably end up with your chosen agent,” says Lanice Steward, head of training, Pam Golding Property group.
It’s often far more effective to sign a sole mandate and allow one agent the space to secure the best sale.
“A sole mandate is an exclusive contract that stipulates an allotted timeframe during which a seller may not appoint another agent to market their property. This ensures that the agent will put maximum effort into fulfilling the goals that have been set within the contract,” explains Adrian Goslett, regional director and CEO, RE/MAX of Southern Africa. In an open mandate, on the other hand, multiple agents from a variety of agencies will be marketing and trying to sell your property.
Why one agent?
A sole mandate allows the appointed agent to create competition among potential buyers and gives them time to negotiate the best possible price for you, rather than having agents competing to close the deal at any cost, often putting the seller’s price at risk.
“There’s no doubt that a single partnership with the right agent increases the peace of mind of the homeowner. The exclusivity of the relationship allows the seller to hold the agent fully accountable for results and also, in the process, gives both parties the time to agree to any changes to the marketing and pricing strategy. It should come with the same level of commitment, risk and return on investment associated with any healthy business partnership,” says Steward.
Adds Goslett, “While some might be inclined to think that signing a sole mandate is restricting, it’s an opportunity to make the process of selling simpler and is the best way to motivate an agent to give the home their undivided attention.”
Logistically, a sole mandate is also a safer option while the threat of Covid-19 still exists because you’ll only have to liaise and deal with one agent, not several, says Goslett.
“This simplifies the process, with far less time spent coordinating your schedule with the various agents and their buyers. From a safety perspective, only one agent will have access to your property.”
“If an agent is working on an open mandate, however, they may be less inclined to spend as much time marketing the property, which will reduce chances of selling. This is worsened during a buyers’ market when agents have even more listings vying for their attention than usual, which means that your home may get even less of their time unless you have signed a sole mandate,” Goslett says.
Having multiple estate agencies or agents marketing your home often means the agents are not as committed to the sale of the property and are less likely to spend more marketing rand on the property, a statement on the Chas Everitt International website reads.
Many South African property buyers have commented that when they see a host of property for sale boards outside a property it creates the impression that the seller is desperate or in need of a quick sale.
“This problem is often exacerbated by the fact that in an open mandate environment the seller has little or no control over what price the property is being offered at – the nett result is often a lower selling price than what should have been achieved on the property,” Chas Everitt states.
In an open mandate, it’s also off-putting for buyers to see the same property advertised in the same online space, but with conflicting images, prices and details, says Steward.
“It’s almost like launching a new product and allowing different sales teams to package, price and market it differently, leading to confusion in the marketplace. Besides that, buyers should be able to rest assured that the agent wants to close the deal as much as they do, but has an ethical obligation, as outlined by the Estate Agents Code of Conduct, to represent the correct market-related value with integrity,” she says.
Be careful, though
Unfortunately, agents sometimes over-value properties to get an exclusive mandate. Steward says sellers should be really careful of this motivation.
“If you have been presented with two or more radically different prices from agents, interrogate them on how they got to that price – because, usually, one of them is wrong. Find out how they obtained their market condition information.”