Choosing An Exclusive Sole Mandate
An exclusive sole mandate is both a marketing and service agreement between the seller and the estate agent – designed to formalize trust and responsibility between the parties by defining the role and service levels of the agent and the financial obligation and level of participation of the seller. A properly constructed sole mandate ensures maximum but controlled outside agency participation from the beginning and creates a win-win situation for both parties.
It is of the utmost importance that the seller secures with the exclusive sole mandate the 4 pillars of effective property marketing:
4.1 a marketing plan driven by result orientated feedback
4.2 introducing the correctly priced property to all buyer agents from the outset at a fair commission split,
4.3 a concentrated effort by a motivated and incentivized agent, and
4.4 security and privacy of the seller and property
4.1 The philosophy of a mandate is simple - you as a seller need your agent to be answerable. If an agent is not answerable to the seller the property can fall to the bottom of the agent’s priority lists. With a sole mandate the agent has greater inducement to study the property thoroughly and to devote time and effort. Very little work is done on an open mandate as it literally only attracts real attention or agent dedication if it is priced competitively. Pro-active marketing of the open mandate property will definitely not be part of the agent’s daily tasks as an estate agent is not paid for time — only for results.Accurate price counseling is also not part of an open mandate – as nobody wants to be the bad news guy! The absence of result oriented feedback by estate agents will emanate from an open mandate.
4.2 Agencies who negotiate sole mandates purely for their own benefit by preventing all outside agents immediate access to the property, uses the seller’s sole mandate to strengthen their business to the detriment of the seller – as they want to keep rival agents out of the market to ensure maximum possible return for the marketing effort and expense. Market dominance is here preferred to a win—win situation for both seller and agent.
It is crucial to have all agents participating in the marketing of the property from the very outsetthrough your contracted sole mandate agent - since the property is considered a “fresh commodity” during the first 4 weeks. Both estate agents and potential buyers will have higher perceptions of competition and urgency and a sale is likely to be concluded not only within a shorter period of time, but also at a higher price. A fair 50/50 commission splitbetween the mandated agent will not only ensure a return on the agent’s investment in your property, but will also encourage other estate agencies to introduce their buyers as soon as possible to your property.
4.3 It is important that the agent will be secured of an income (commission) should he or she succeed in sourcing a buyer. It is too risky for an agent to spend time going through buyers’ lists, canvassing potential buyers, liaising with colleagues — and spending money on expensive advertising and marketing, without earning a cent for his or her efforts. A sole agent will often obtain a higher price when they know they have time to negotiate with the buyer, without worrying that another agent might "get in first with an offer”.
4.4 Last but not least - your security and privacyare better protected with an exclusive sole mandate as only your sole agent will contact you and bring the buyers to your home.
