Many different estate agents can have a mandate to market your property, meaning that one estate agent cannot claim to have the sole right to market it.
Giving an estate agent a sole mandate to market your property, means that you cannot confer a similar mandate on another estate agent before the expiry of a determined period. If another estate agent sells or lets your property during this period, the estate agent with the sole mandate can claim damages from you, which may be equal to the commission that he could have earned if he sold the property.
However, you can sell or let the property yourself without any implications during this period as long as you make sure the wording in the mandate does not state that the estate agent has ‘sole and exclusive selling rights’ or ‘sole right to sell’ or ‘sole authority to sell’.
Sole and Exclusive Mandate
Nobody (including you), except for the estate agent holding the sole and exclusive mandate, is allowed to market your property before the expiry of the determined period of the mandate. This means that should anyone other than the mandated estate agent sells your property, you will still have to pay commission to that estate agent.
The estate agent, to whom the sole- or sole and exclusive mandate was given, is still entitled to his commission if he introduced a buyer to your property during the mandated period, depending upon the wording of the mandate document, and this buyer only purchases your property after the expiry of the mandate, perhaps through you as the owner or through another estate agent. It is important that you read and understand the terms and conditions of the mandate document.
In the case of a Multiple-listing, you would normally give a certain estate agent the sole and exclusive mandate to sell your property for a certain period, after which this agent, the “listing agent”, lists the property with a computerised central service. The information is then available to other participating agents who are free to sell your home. The selling agent and the listing agent are then in agreement that the agent’s commission is shared between them. You do not pay more agents’ commission. It remains the same amount agreed upon, but the agents share it between themselves.
The only benefits to this option against a open mandate are that you as a seller deal with one person. The agent benefits as others can be doing the work and they still get commission. The negative is that other agents will only sell your property for less commission or shared commission if there is a shortage of properties on the market.
In the case of a Dual Mandate, you would normally give a two estate agent You do not pay more agents’ commission. Whichever agent sells the property gets the commission. It remains the same amount agreed upon with the agent.
So which mandate?
Sole or Exclusive Mandates
- Most agents wanting a sole or exclusive mandate will indicate that they can secure the highest price. How is this price worked out?
- Market value of properties need to take the following factors into consideration and especially in smaller towns
- Actual sales value
- Municipal value
- Current prices of properties on the market (This needs to consider inflated prices)
- Condition of property and special features
- All of the above needs to be broken down into 2 areas in working out the values
- for greater village
- also localized to properties within a smaller radios
- There are then exceptions that need to be considered in working out the averaged for a market value
- If the agent cannot show how they get to the price they are recommending then do not go with the sole or exclusive mandate.
- The Sole mandate should creates a moral commitment between the agent and the seller and motivates the agent to sell your property. If this is the case the agent is confident to sell the house within the period and for the amount so amend the mandate to include the following.
- decreasing commission if they cannot get the price they are committing to
- limiting the mandate to 3 months with no automatic renewal or hidden clauses to still get commission after this period
- If not sold in the 3 month the agent will not be allowed to sell the property when you make it an open mandate
- The agent with a sole mandate should provide extra that you would not get with an open mandate.
- will they provide you with regular activity reports
- will they spend more advertising budget on your home
- or what are you getting?
- Means you are only dealing with 2 agents but can also be achieved with an open mandate where you sign up only 2 agents.
- So what extra are you getting for a dual mandate?
- You must limit the time and take a number of the aspects referred to in Sole mandate into consideration.
- You can control the number of agents.
- You can appoint 1 agent or 20 agents it is your choice.
- Sometimes buyers only work with one or two agent the same way sellers decide to sole mandate with one agent this means you could be missing your buyer
- If you do not like a agent you can cancelled the mandate and your property is still on the market
- If the agent does not put in the effort to sell the property is still going to be marketed.
- Agents and agencies use different ways to market a property and this gives you more marketing.
Why a mandate
- The Estate Agency Affairs Board requires all agent to have a mandate before they my advertise any property.
- Did you know that one of the benefits of dealing with a qualified and registered estate agent is the protection and legal recourse that their Fidelity Fund Certificate offers? This protection extends to the seller and the buyer and includes protection for deposits paid by buyers. Private sales do not enjoy this protection.
- No mandate can result in the risk of double commission claims.
- The mandate also clarifies any commission payable upfront as negotiating this at the time of sale can mean a loss of a sale. Why Commission?
- The mandate clearly specifies the price of the property that the agent must market the property at. Without this your property may be marketed at a lower price just to attract buyers to that agent.
It is safer to have a limited number of people through your home and the estate agent with your mandate will ensure to their best ability that the prospective buyers are “for real”.
- Has your agent checked that it is a genuine buyer