Mandate or no Mandate - that is the Question?

In opting to use a mandate, the home-owner is entitled to reward commission to the specific agent, if the property is sold within the specified number of days declared within the mandate. “When entering into this legal contract between seller and estate agent, the seller needs to bear in mind that the mandate does not guarantee the sale of the property, it should rather be regarded as a commitment from the agent to perform at the highest standards and exhaust all resources in the pursuit to sell your home,” comments Richard Gray, CEO of Harcourts South Africa.

Highlighting benefits, Gray adds, “A sole mandate offers exclusivity, it deliberately focuses a pool of people in one place and when people are focusing in one area it then creates competition. Being able to effectively market the property through the right channels is an essential marketing strategy and is a key benefit of mandates- to draw people in and create competition.”

Once the difficult decision of choosing to work within the parameters of a sole mandate has been decided, an even harder decision presents itself in whom to choose to represent your property. It is the responsibility of the seller to make an informed choice with clear knowledge of agency as well as the estate agent’s past sale record.

“It is completely necessary for relevant questions to be addressed to agents who are being considered for the task.  Questions pertaining to their track record of past sales, the names of the last three successful sellers they worked with, the percentage of mandates that they are selling and on average, how long it takes for them to sell a property. It should be an absolute requirement that an agent provides their client with a presentation addressing the questions mentioned,” Gray states.

Confusion can arise when in a situation where an agent without the contracted mandate gets an offer on a property. It goes without saying that it is going against the
Code of Conduct when an agent knowingly sells a mandated home and in doing so will in most cases have to pay the commission over to the rightful agent. In the event that a seller knowingly accepts an offer from an outside agent, the seller can be liable in paying both agents commission. However, if the correct procedures are followed and the outside agent works with the mandated agent, a “finder’s fee” can be negotiated in which the agent bringing the sale will receive a percentage of the agreed upon commission.

Armed with the necessary knowledge on the benefits a sole mandate offers, it is at the discretion of home-sellers out there if they chose whether or not to operate from a mandate. Gray concludes, “At Harcourts, we encourage clients to work within a mandate. This guarantees a tailor-made approach to the sale of your property, which in return equates to the swift offer of purchase from potential home-buyers.”


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