EXCLUSIVE MANDATES – A SELLER’S FRIEND OR FOE?

Few topics in real estate are surrounded with so much emotion and hype as exclusive mandates. It is however a fact that an exclusive mandate (if given for the right reasons & to the most competent estate agent for the job) is possibly the most effective way to ensure that a realistically-priced property is sold as soon as possible for the highest price.

Most sellers argue that if the sale is urgent, as many estate agents as possible should be instructed to market the property ensuring the widest possible marketing effort. It is suggested that this is incorrect. Nothing screams more of desperation as a few “for sale” signs or multiple listings on the Internet of the same property. Over-exposure often results in a reduced sales price below market value as the property loses its air of uniqueness.

Some advantages of granting an exclusive mandate are:

  • The estate agent focuses all his/her marketing energy & resources on the property exclusively – a successful sale means that an exclusive mandate is like a post-dated cheque to him/her
  • The seller only deals with one estate agent & holds him/her accountable
  • Security of the property and its inhabitants is maintained
  • The property is seen by the public as “exclusive” and the danger of over-exposure is eliminated
  • The percentage commission is agreed upon prior to the sale and the agent negotiates a price as high as the market allows, often resulting in a higher sales price
  • It ensures that a double commission claim can never be instituted. In open mandate scenarios it often happen that a purchaser is introduced to the property by one estate agent and the same purchaser then purchases the property through another agent. In law the first estate agent may be entitled to institute legal action against the seller to recover his/her lost commission

Who should you appoint as an exclusive agent?

  • Try and stick to agents employed by the well-known brands. They usually employ the most professional agents, manage quality service delivery and constantly train their agents in fresh marketing ideas & strategies
  • Ask around – clients who had good experiences with estate agents are more than willing to refer them
  • Determine which individual agent is the most active in your area. Drive around and look for “For Sale” and “Sold” boards. However, since security issues exist in many suburbs, seller are less inclined to allow these boards.
  • Visit the major property websites (Property 24, Private Property, RE/MAX etc) and search for a property similar to yours in the area. Within a matter of minutes you will be able to determine who the “mover & shaker” agents are. Prepare a shortlist of the best performers
  • Invite the agents on the shortlist to do an evaluation and exclusive mandate presentation. Choose the most impressive one.
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