select
|

Sole mandates: is it 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 RE/MAX of Southern Africa CEO, Adrian Goslett, 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 actually 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 a 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 of the legalities that are involved in the property sales transaction,” explains Goslett.
 
He notes that when it comes to mandates, sellers have the option of either signing an open mandate or a sole mandate. Goslett 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 in the market, it is also widens the scope for confusion as to which agent was the effective cause of the sale,” notes Goslett. “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.”
 
He also notes that with an open mandate not having to be a written agreement, there is always the chance that some elements be unclear and not interpreted correctly. “Having a clear, written contract in place will protect the seller and minimise the chance of any misunderstandings. A written contract will also ensure that the agent puts in maximum effort into obtaining the goals that have been set. An open mandate could restrict the amount of time and money an estate agent will spend on marketing the property, which will reduce the home’s exposure,” says Goslett.  
 
Unlike an open mandate, a sole mandate is a legally binding document which must be in writing. This 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 can 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 still be a fee payable to the agent in the case where the homeowner does sell the property themselves,” says Goslett.
 
Sellers do have the option of giving the agent an exclusive sole mandate, which is essentially the same as a sole mandate but 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 authorise the agent to accept or reject an offer on their behalf.
 
“The entire concept of a sole mandate is to create efficiency and maximise 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 place. 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 Goslett.
 
He adds that logistically a sole mandate makes more sense in that the seller only has to liaise and deal with one agent and not several. This will simplify the process and far less time will be spent coordinating the seller’s schedule with the various agents. It is also better from a safety perspective to only have one agent that has access to the property.
 
According to Goslett, 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. Goslett says that it is vital that the agent works according to what is within the seller’s best interest at all times, giving sound professional advice and 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 will ensure 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,” Goslett concludes.


  Comment on this Article

  Please login to post comments

Post to my facebook wall
  
2000
Characters remaining


    Latest Property News
    • 22 Nov 2017
      Most people know of the Community Schemes Ombud Service (CSOS) and that levies must to paid to fund its operations. In this article the experts at Paddocks will address some of the issues that are causing confusion.
    • 22 Nov 2017
      While sales have noticeably slowed in most sectors in most Cape town suburbs, the security estate sector in Constantiaberg has bucked the trend by remaining buoyant, with sales by August this year already surpassing total sales in 2016.
    • 22 Nov 2017
      The end of the year is fast approaching, and so are all the travellers, tourists and holidaymakers. For those who live near or own a property in a holiday-hotspot, the festive season also brings with it an abundance of short-term rental opportunities. Its a great way for property owners to make a few extra rand for their own holidays or to put towards their savings.
    • 21 Nov 2017
      The buying process is over, and the moving truck has delivered your household goods to your new property. Now it’s time to unpack and turn your new house into a home.
    • 21 Nov 2017
      When an offer to purchase a property is signed by both buyer and seller, this constitutes a binding agreement or “Deed of Sale” between the two parties. However, in most cases the “standard contract” might not be enough to cover all the specifics pertaining to the sale. The agreement may require some additions or alterations to clauses, which needs an expert hand in the drafting of such
    • 21 Nov 2017
      As more and more South Africans look to invest in property abroad, Spain is offering them one of the best deals in global real estate.
    • 20 Nov 2017
      Since 2012, sectional title complexes have been leading the South African property market, not only in terms of price growth, but sales volumes as well. Remaining relatively strong, even in the face of 2017’s political and economic turmoil, experts say this market segment could offer valuable insight into South Africans’ property purchase priorities.
    • 20 Nov 2017
      Regardless of whether you are purchasing your first start-up home, downsizing or moving in with roommates, finding ways to maximise small spaces can be a big advantage, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
        
    X
    Subscribe to the MyProperty Newsletter

    Name  
    Last Name  
    Email Address  
    Email Frequency
    select
    X
    Share this Page

       
    For Sale Property
    Rental Property
    More Options
    About
    Connect with us
    FEEDBACK