A seller will often ask of us whether or not they should sign a sole mandate with an estate agent. The thinking is often that by giving an open mandate to many different agents, that the seller has a better chance of selling his property.

It should be noted that the cost of marketing and selling a property to the agent is high. Advertising, office expenses, telephones, petrol and so on all have to be paid by the agent. People who wish to sell their property, ask the agent for 100% effort on the part of the agent.

It is only fair and reasonable, for the agent to ask the client for an equal commitment in return. 

An estate agent is going to be incurring costs up front, without the guarantee of any payment in return, and all a seller has to do, is agree not to give a mandate to another estate agent for a certain period of time and allow the agent the opportunity to be the only agent to market and sell the property during the mandate period.

We submit that this is a fair trade, and allows both the agent and the seller peace of mind to the effect that they are committed to each other at least for the duration of the mandate period. The agent is assured that if he uses all his resources and time there is a strong likelihood that he will procure a purchaser for the property, and the seller is assured that the agent is using his efforts to secure the sale during the mandate period. Furthermore, and more importantly from a Seller’s perspective, an open mandate- that is the situation where the seller allows many agents to work on the same property at the same time- places the seller at risk of paying more than one commission in respect of the sale of the property.

Potential purchasers usually approach a number of estate agents working in a particular area in which the purchaser is interested in purchasing a property to view what properties are on the market for sale. There is a great chance that the purchaser who eventually purchases the property, has dealt with at least two of the agents who may have had an open mandate in respect of the property. The seller in such an instance could be faced with double commission claim. In our experience this happens more often than Sellers expect. The agent who finalises the deal is entitled to commission, but so may the other agent or agents who introduced the purchaser or the purchaser’s spouse, relative or other persons assisting in the viewing of property to the property.

For example, after viewing the property with the first agent, the purchaser may have proceeded to view other properties not realising that that property was in fact suitable given the other options available. By the time the purchaser views the property with the second agent the purchaser has had sufficient time to realise that this is the right property for him, and proceeds to submit the offer through the second agent. Obviously it is only because he has had the opportunity to compare the property, after the introduction by the first agent, with others that he takes the next step of making an offer. These purchasers often fail to disclose that they have already viewed the property not realising the importance of this.

Even if the property was just mentioned to the purchaser by the first agent, or the purchaser driven past the property without viewing the interior by the first agent, there could be a successful claim by the first agent for commission. As a result of the focus of our practice on property law, and the various issues that flow therefrom, disputes between a seller and an estate agent or agents are often brought to our attention for guidance and arbitration. More frequently than not, the problem arises as a direct consequence of a number of estate agents being involved in the marketing of a property. Much stress, trouble and ultimately cost, can be avoided, where a seller signs a sole mandate with one estate agent to begin with.

Our advice to sellers is therefore to commit to a particular agency and that agent will reciprocate the commitment.
“Bring me an offer then I will deal with you” may sound to a seller like he is keeping his options open, but it is usually the less experienced, and perhaps more desperate estate agencies who will accept such mandates given the cost of delivering the required service.

The successful, professional and experienced estate agents, who understand the property market, and what it takes to deliver the promised service, will only accept signed sole listing mandates, as they want to be assured that by giving a seller 100% of their effort that they will earn the commission for themselves.

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