| Selling
your home can be one of the most stressful experiences of your life.
One of the first steps is about giving the agent a selling mandate
and it's essential to be informed. Sellers are completely within
their rights to ask their agent to explain the pros and cons of
selling their homes on a sole mandate, open mandate or through a
multiple-listing service. Here is some clear-cut information to
help you through the task:
There
are essentially three types of mandates : (i) Sole mandates, (ii)
Open mandates and (iii) Multi-listings.
A mandate, once signed, is a contract between you and the agency
and you cannot simply change your mind about its provisions later
and revoke it.
The
Sole Mandate:
In
this case a mandate is given exclusively to one agency to sell your
property. The sole mandate system is the most popular in the South
African market. It has a long tradition within the industry, which
has allowed professional estate agents to perfect the accompanying
marketing plans, ensuring that the marketing of the property receives
their full attention and commitment.
Selling by sole mandate ensures the most possible privacy and least
amount of inconvenience to sellers, and also protects them from
double commission claims.
This form of marketing is, however, most effective when embraced
by well-established agencies that have strong market penetration
in the area in which the property is situated, and whose budgets
allow for extensive media advertising.
The choice of whether to go with the sole mandate is entirely yours;
no agency can force you to give it a sole mandate. Naturally agencies
prefer sole mandates because of the exclusive rights they have that
justifies the effort and costs they put into marketing the property.
They have to offer you exceptional services. They must advertise
your home in the appropriate publications as well as on the Internet,
with 'For Sale' boards outside the property (if the local municipality
allows it), and a show house must be held at least once a month,
throughout the mandate period.
It's sensible to give a sole mandate for a period of three months.
Beware of mandates that add a clause stating that the mandate will
continue indefinitely beyond the expiry date, unless you cancel
it in writing. The agency may come looking for commission a year
later when you finally sell the property.
The
Open Mandate:
This
is often no more than a verbal instruction to an agency to find
a buyer without any further commitment on the seller's part. The
open mandate liberates sellers from the need to sign any mandate
documents, but is the least effective form of marketing. Professional
agents are reluctant to actively promote an open mandate property
in terms of advertising and show days, because they know the door
is always open for a competitor to step in with a buyer after all
their hard work and promotional costs.
It appears attractive and non-committal, but agencies obviously
don't like doing business like this. The most professional and successful
sellers will brush aside open mandates. It's always a question of
quid pro quo - value for value. If you are looking for a professional
agent to deliver a professional service, the open mandate will probably
not be favoured.
Multi-listing:
While
it is the system most frequently used by sellers in the United States,
it also has merit in South Africa, where it is fairly widely applied.
The property is listed by the agency of the seller's choice, and
is then opened up to the local multiple-listing service members,
any of whom can market and sell it.
This guarantees good market exposure, but be prepared to be inconvenienced.
You will be required to hold what is known as an 'open hour' at
least once during the period, where representatives of each agency
come to your home and assess its condition. All agencies involved
may now sell your home. This can be inconvenient as appointments
can be requested at awkward times for prospective buyers.
You can't pressurise the agencies to market your property consistently.
They can come and go as they please, and advertise your home as
they choose. They have no obligation to you because numerous agents
are involved and have the rights to market and sell your property.
Buyers naturally go from one agency to another to get the full inventory
of properties on sale, so it's quite possible that the same buyer
may be introduced to you by different agencies. You need to exercise
some care here, as you may be liable for double commission to both
agencies when you sell. You'll always be obligated to the agency
that actually concludes the deal, as its sales agreement will bind
you contractually to pay its commission. If another agency brought
the same buyer to you previously and presented you with a written
offer for the same purchase price, or higher, it can claim commission
too on the grounds that it was the effective cause of the sale.
It won't help you to say you weren't willing to sell initially but
changed your mind later.
Make sure the agency finalising the contract indemnifies you against
any claim for commission by the other. This caution does not apply
where the first agency merely introduced the buyer to the property
and nothing further transpired.
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