-Seller Mandates…

Understanding the Pros and Cons of the different types of seller mandates:

Selling your home can be one of the most stressful experiences of your life. One of the first steps is about giving the agent a selling mandate, and it’s essential to be informed.

Sellers are completely within their rights to ask their agent to explain the pros and cons of selling their homes on a sole mandate, open mandate or through a multiple-listing service.

Here is some clear-cut information to help you through the task:

There are essentially the following types of mandates :
(i) Sole mandates,
(ii) Joint Sole Mandates
(iii) Open mandates and
(iv) Multi-listings.
A mandate, once signed, is a contract between you and the agency and you cannot simply change your mind about its provisions later and revoke it.

(i) The Sole Mandate:

In this case a mandate is given solely to one agency to sell your property. The sole mandate system is the most popular in the South African market. It has a long tradition within the industry, which has allowed professional estate agents to perfect the accompanying marketing plans, ensuring that the marketing of the property receives their full attention and commitment.
Selling by sole mandate ensures the most possible privacy and least amount of inconvenience to sellers, and also protects them from double commission claims.
This form of marketing is, however, most effective when embraced by well-established agencies that have strong market penetration in the area in which the property is situated, and whose budgets allow for extensive advertising.
The choice of whether to go with the sole mandate is entirely yours; no agency can force you to give it a sole mandate. Naturally agencies prefer sole mandates because of the exclusive rights they have that justifies the effort and costs they put into marketing the property.
They have to offer you exceptional service. They must state in the sole mandate what their marketing plan is (i.e. advertise your home in the appropriate publications as well as on the Internet, on Social Media, to a database of buyers, with ‘For Sale’ boards outside the property (if the local municipality allows it), etc).
It is however VERY IMPORTANT to make sure you choose the right agent. Make sure that they have  decent marketing plan that will give your property maximum exposure. Make sure they have experience in the field and ask how many sales they made in the last 12 months. You can also learn a lot about an agent by looking at their online presence and profile on social media.
Sole mandates must be in writing and signed by the seller and agent, and must specify a mandate price and an end date to the mandate.

(ii) The Joint Sole Mandate:

Similar to the sole mandate, except that the sole mandate is given jointly to 2 or more agents. It will also be agreed on what basis the commission will be split between the agents, depending on which agent successfully sells the property.
Joint Sole mandates must also be in writing and signed by the seller and the joint agents, and must specify a mandate price and an end date to the mandate.

(iii) The Open Mandate:

This is often no more than a verbal instruction to an agency to find a buyer without any further commitment on the seller’s part. The open mandate liberates sellers from the need to sign any mandate documents, but is the least effective form of marketing. Professional agents are reluctant to actively promote an open mandate property in terms of advertising costs, because they know the door is always open for a competitor to step in with a buyer after all their hard work and promotional costs.
It appears attractive and non-committal, but agencies obviously don’t like doing business like this. The most professional and successful sellers will brush aside open mandates. It’s always a question of quid pro quo – value for value. If you are looking for a professional agent to deliver a professional service, the open mandate will probably not be favoured.

(iv) Multi-listing:

While it is the system most frequently used by sellers in the United States, it also has merit in South Africa, where it is fairly widely applied. The property is listed by the agency of the seller’s choice, and is then opened up to the local multiple-listing service members, any of whom can market and sell it. The commission will be shared between the selling agent and the seller’s mandated agent.
This guarantees good market exposure, but be prepared to be inconvenienced.
You will be required to hold what is known as an ‘open hour’ at least once during the period, where representatives of each agency come to your home and assess its condition. All agencies involved may now sell your home. This can be inconvenient as appointments can be requested at awkward times for prospective buyers.
You can’t pressurise the agencies to market your property consistently. They can come and go as they please, and advertise your home as they choose. They have no obligation to you because numerous agents are involved and have the rights to market and sell your property. Buyers naturally go from one agency to another to get the full inventory of properties on sale, so it’s quite possible that the same buyer may be introduced to you by different agencies. You need to exercise some care here, as you may be liable for double commission to both agencies when you sell. If another agency brought the same buyer to you previously, it can claim commission too on the grounds that it was the effective cause of the sale. This could become messy and end up in court.

Please contact us if you have any questions or need guidance on selling or buying property. We specialize in making the process as smooth as possible.

We look forward to hearing from you…

• Email: info@PropLA.co.za

• Cell: 082 324 7915

• WhatsApp: Click here to send us a message.