That's the warning from Mike Bester, CEO of Realty 1 International Property Group, who says they are also throwing away control of the selling process.
Bester said many sellers regarded a sole mandate as a death sentence, whether due to misinformation in the market place or as a result of bad experiences with unprofessional agents in the past.
Yet, he pointed out, a sole mandate in the hands of a professional provided a set of controls to sellers that was backed by the Estate Agency Affairs Board (EAAB) Code of Conduct.
"This Code stipulates under point 3.10.2 that an estate agent who takes a sole mandate has to provide a written marketing plan to the seller," he said.
"As a result, sellers are protected by the law and can accordingly cancel their sole mandate in the event that the agent fails to perform in terms of the marketing plan. A sole mandate also protects sellers from double commission claims that could arise when more than one entity is involved in the selling process."
Bester said further that in the current real estate environment, where market activity in most parts of the country had been suppressed by a series of interest rate increases, sellers wanted more information and control over their situations than ever before. Driven by the fear of being locked into a contract that would undermine their chances of selling, Bester said the tendency was often to offer the property to a number of different agents.
"The feeling is that 10 agents are likely to get the property sold more quickly than one," he explained.
"Yet, the truth is that one good mandated agent will do the same work as 10 people in a partnership that safeguards the interests of both parties and ensures that the seller receives regular updates."
Working with an experienced agent on a sole mandate basis not only allowed sellers to work out an achievable price for their properties but also ensured that they were party to the marketing plan at its inception. The marketing plan, according to Bester, should include when and how regularly and in which publications the property would be advertised and how often the agent intended doing show houses.
"Advertising needs to be targeted at specific markets for it to be effective and get the best return on time, effort and money spent," he said.
He added that successful agencies tended to shy away from open mandates, preferring to spend their advertising budgets and time on their sole mandate clients.
Far from chasing buyers away, Bester said sole mandates ensured that they negotiated with the same agent, which created a platform for competition.
Insofar as the legal requirements of a sole mandate, Bester said it had to stipulate both a starting and ending date as well as a specific price. It also had to be signed by the registered owner of the property who agreed to the price and terms of the agreement.
"On the grounds of the written sales agreement, the agent is then legally bound to deliver good service and give honest and regular feedback. The danger is therefore not in granting a sole mandate to an agent but in not doing so," he concluded.
Readers' Comments
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Interesting article, but asking the head of an estate agency to comment on the benefits of a sole mandate is not too different from asking a cigarette manufacturer whether smoking is bad for you.
In my experience a sole mandate makes for a lethargic agent who knows he/she has no competition in the sales process. – Greg Starke
I want to agree with the sentiments expressed in this article. My house has been in the market since October 2007. To date there is not a single offer made on the property. The area is called Carters Glen in Kimberley and is a quite middle-to-upper class suburb, with no known incidents of crime since moving in.
Having realized the possible bond repayments of the prospective buyer, with the escalating interest rates, I made some necessary changes to the house to offer the prospective buyer the opportunity to just move in without having to engage in renovations and the likes, but I must say that this did not help either.
The house was first listed as a sole mandate for a month and a half, then open mandate till mid-February this year and now I have reverted to a sole mandate again. I am now not waiting for a buyer, but a miracle to happen. If there is anyone out there with tips, I am willing to try anything. – O.R. Motshebe
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