When it comes to selling your home it seems logical to want a number of agents working for your cause, but you may actually find yourself worse-off in the end.
Estate agents have, for years, tried to encourage property sellers to put their homes on the market through sole mandates if they want to sell their properties quicker and fetch the highest possible prices.
This is contrary to general seller belief that selling a home via open mandate, which allows a number of agencies to find buyers, gives them better chances of sales.
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“There is no doubt sole mandates consistently deliver the best results for sellers,” says Samuel Seeff, chairperson of the Seeff Property Group.
“There might be the odd example where an open mandate has brought about a sale, but time and again our own sales records and the market as a whole has shown a sole mandate delivers the best results.”
Other agents agree, explaining that while open mandates may make sellers believe that having more people out looking for buyers will guarantee a good sale, the opposite is true. This is because one estate agent working on the sale of a home will be more committed to the project – in order to earn the commission – than when they are competing with many other agents.
“When it comes to property listings, quality is far more powerful than quantity,” says Craig Mott, Cape Town regional sales manager for the Rawson Property Group.
Thanks to the accessibility of online property portals, he says adding agents to your team doesn’t necessarily extend your property’s reach. Rather, it tends to dilute your sales message by requiring buyers to sift through multiple copies of your listing – some of which may be significantly less professional and effective than others.
“You create a far better impression by having a single, accurately priced listing that includes professional-quality photos and compelling descriptions.
“Having the backing of a well-respected agent or agency also adds to your credibility, reassuring buyers that they’ll be dealing with an experienced property professional.”
Under ordinary circumstances, competition breeds excellence, but when it comes to property sales, however, Mott says competition can incentivise agents to sell fast rather than high.
“Agents on open mandates are well-aware that another agent could sell the property at any point. That means they’re more likely to try to push through a lower offer than risk losing out while negotiating a higher price. Likewise, they’re unlikely to put more than the bare minimum into marketing a property when they have no guarantee they’ll be able to recoup those expenses through a sale.”
Other benefits, says Mike Greeff, chief executive of Greeff Properties, are:
- An estate agent on a sole mandate will never pressurise a seller into accepting an offer, which will leave the door open to negotiations from prospective buyers.
- Choosing a sole mandate means your agent will provide a tailored marketing strategy for your property which will highlight print and online advertising.
- Once selling your home on sole mandate, your agent will remain committed to your property.
- Sole mandate properties are extensively advertised to ensure maximum exposure for your home.
“Commission need not be a sore point once the sale of the property is official. This matter can, however, become less straightforward when there is more than one agent hired by the seller,” he says.
Mott agrees, adding that open mandates mean communicating with multiple agents over multiple show houses and multiple private viewings, and that can become quite invasive and annoying for sellers.
“You also risk becoming liable for double commission if there’s any dispute over which agent brought in your eventual buyer. That’s not something any seller wants to have to deal with.”
As a sole mandate is an agreement between a seller and one agency to find a buyer for the house, the agent knows they have a high possibility of selling the home so they can invest time, effort, and money in the marketing of the property, says Lew Geffen Sotheby’s Chris Cilliers.
But with a joint mandate, “buyers may be spread over two or three agencies so agents will encourage their buyers to make an offer”.
“As it is unethical for a seller to disclose this offer, there is no competition between potential buyers as this will more often than not result in the seller receiving lower offers.”
Cilliers adds: “People are scared of a sole mandate as they say they are stuck with one agent and maybe the buyer is listed with another agency. But buyers look for homes, not for agents. If their dream home is with another agency, they will contact that agent or they will ask the agent they are working with to arrange a viewing.”
Sellers also need to bear in mind that a sole mandate agreement can also be structured in such a way that if the agent does not deliver on the expectation, the mandate can be cancelled.
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