PROPERTY NEWS - Is it better to work with one estate agent or work with many? Many homeowners feel that if they sign a sole mandate with an agent they are reducing their chances of finding a buyer in the most optimum time frame and for the highest price.
However, while homeowners may think they are limiting their chances by signing a sole mandate, the truth is that it will be far more beneficial to them than they think.
Signing a mandate means that the homeowner is giving the real estate agent an exclusive contract to market and sell a specific property. It is then up to that agent to find the right buyer for the home, ideally achieving the highest possible price within the shortest time frame.
The agreement also allows the agent the right to deal with all of the legalities that are involved in the property sales transaction.
Open mandate or a sole mandate
Sellers have two options when it comes to mandate agreements – an open mandate or a sole mandate. If a seller opts for the open mandate route, they are taking the exclusivity out of the deal. This means that multiple agents, often from a variety of agencies, will be working to secure the sale. As with most options in life, an open mandate has its pros and cons.
Open mandate or a sole mandate
Sellers have two options when it comes to mandate agreements – an open mandate or a sole mandate. If a seller opts for the open mandate route, they are taking the exclusivity out of the deal. This means that multiple agents, often from a variety of agencies, will be working to secure the sale. As with most options in life, an open mandate has its pros and cons.
While there are several agents tapping into their network to find the right buyer for the home, it can bring about complications and there is always the chance of a possible double commission claim.
An open mandate allows for a wider net to be cast, however in doing so also opens up the potential for confusion as to which agent was the effective cause of the successful sale. One agent may have signed a sales agreement with a buyer, but it could have been the result of another agent’s advertising and marketing.
Unlike a sole mandate, which is a written agreement, an open mandate can simply be a verbal agreement between the parties. If there is no written agreement in place, certain aspects could be misinterpreted, which could cause conflict.
Unlike a sole mandate, which is a written agreement, an open mandate can simply be a verbal agreement between the parties. If there is no written agreement in place, certain aspects could be misinterpreted, which could cause conflict.
A clear, written contract protects both the seller and agent, reducing the risk of any misunderstandings. A written contract will also ensure that the agent puts maximum effort into fulfilling the goals that have been set. If an agent is working on an open mandate, they may be less inclined to spend as much time and money marketing the property, which will reduce the home’s chances of selling.
Legally binding document
Conversely, a sole mandate is a legally binding document that must be reduced to writing. Within the agreement, an agent is given the exclusive right to sell the property for a period of time. During the allotted time frame, the seller may not appoint another agent to market the property.
Legally binding document
Conversely, a sole mandate is a legally binding document that must be reduced to writing. Within the agreement, an agent is given the exclusive right to sell the property for a period of time. During the allotted time frame, the seller may not appoint another agent to market the property.
In the event that the seller is not satisfied with the service they receive from the selected agent they can appoint another agent once the sole mandate period has elapsed.
If a homeowner has signed a sole mandate, they will still be entitled to market and sell the property themselves, but only if it has been confirmed in writing with the estate agency that has been awarded the mandate. In an instance where the homeowner does sell their property, they may still be required to pay a fee to the sole mandated agent.
