Property professionals sometimes joke among themselves that if they could get an extra 1% commission every time somebody asked them why they should sign a sole mandate they would only have to work half the time they do!
More seriously though, the question around the need for a sole mandate when putting a property on the market is an important one and worth understanding.
"It's a property question to which the best answer seems counterintuitive," says Michelle Cohen, principal at Leapfrog Johannesburg North East. She reckons this is why there is so much confusion about whether signing an agreement to one agency the exclusive rights to market and sell a property evokes so much confusion.
A sole mandate - sometimes also called an exclusive mandate - is an agreement whereby the seller gives one selected agency the sole right, or mandate, to market and sell a property. "The agreement must be in writing and should stipulate the length of time the mandate applies for, the selling price of the property, the commission structure agreed upon, as well as any other terms and conditions pertaining to the sale of the property," Cohen explains.
The key reasons for signing a sole mandate with an agency is to avoid the duplication of potential buyers and the risk of potential double commission claims. "Bluntly put, it can become very messy and unnecessarily complicated when there is more than one agency trying to sell a property, which often also leaves potential buyers frustrated and hampers the selling process," Cohen explains.
Most commonly, having various agents on the property can lead to disputes and disagreements about the pricing of the property, which in itself can have far-reaching consequences.
When there is just one agency marketing a property the risk of buyer duplication is greatly reduced and the property doesn't get stale: "With a sole mandate there is also far less hassle and admin for the seller, simply because you don't have multiple agencies bringing potential buyers to view the property and as a seller you don't have to spend hours having to wade through ostensibly the same paperwork but for many different agencies," Cohen says. "You have one committed and accountable person responsible for the sale of your property".
At the end of the day the goal for the seller - and by extension, the agent - is to sell the property as fast as possible and at the highest possible price, to a buyer who is able to perform in terms of the agreement. "Time and again we've proved that with a sole mandate this is far easier to achieve when there is one agent dedicated to that goal," Cohen concludes.
