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Here’s when an agent will spend the least amount of time marketing your home

Managing time.resize

Picture this: Two agents, smack bang in the middle of one of the craziest, busiest days of their year. One of these agents has a sole mandate to sell a home similar to yours one block away. The other is one of the six agents trying to sell your home. A buyer looking for something specific in your neighbourhood asks both of these agents for more info on the home they are marketing.  Remember these agents are busy, busy, busy they need to prioritise and manage their communication to get through the day.

The agent with the sole mandate is significantly more likely to answer the buyer, much sooner than the agent marketing your home on an open mandate, the buyer views the home, makes an offer, moves in, and become your new neighbour while you are still trying to decide whether you should rather agree to one sole mandate with a specific area expert for the next six months and actually get your home sold.

This is because agents spend 80% of their time and effort on sole mandates and the remaining 20% on open mandates.

Kevin Abbott, sales associate at RE/MAX Premier, says that the reason is because agents don’t want to spend time, money and effort marketing a home, only to lose the deal to another agent. “Agents work on a commission basis, so if they don’t sell, they don’t make money.  An open mandate is risky for an agent, as it could cost them money and result in no reward,” explains Abbott.

So what are the options?

The options.resize

There are typically three options when it comes to mandating agreements – an open mandate, dual mandate or a sole mandate. If a seller opts for the open mandate route, they are taking the exclusivity out of the deal – giving the home to multiple agents to sell, often from a variety of agencies.

“While this means that several are tapping into their networks to find the right buyer for the home, things can get complicated, and there is the danger of the seller having to pay a possible double commission,” advises Abbott.

According to Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa, unlike a sole mandate, which is a written agreement, an open mandate can simply be a verbal agreement between the parties. If there is no written agreement in place, certain aspects can be misinterpreted, which could cause conflict.  A clear, written contract protects both the seller and agent, reducing the risk of any misunderstandings.

The downside of an open mandate

The downside.resize

According to Abbot another problem with an open mandate is that when buyers drive up to a home with several sign boards outside, it screams desperation – this isn’t the message that sellers want to convey. “Nothing scares away prospective buyers quite like desperation,” says Abbott. “Immediately, potential buyers start to question why it takes so many agents to sell the home, thinking there could be some underlying issues that they are not aware of.”

He says that in an open mandate scenario agents will bring the seller the first offer they receive, which might not be the best offer – this is because they want to get the offer to the seller before another agent does.  “The thing is that when selling your home, you want the buyers to be competing and not the agents. The agents are not the ones who are going to buy the property.”

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5 COMMENTS
  • Grant 10th August 2017

    The scenario painted above is misleading. The underlying assumptions are that of poor service delivery and lack of responsiveness because an agent is on an open mandate. The level of service should apply regardless of the nature of the mandate. Open mandates create competition between agents in terms of selling the home and commission levels, both of these beneficial for the Seller.

    Secondly, an open mandate to two or three area specialist agencies does not indicate desperation, it indicates a Seller is savvy and looking to get the greatest level of exposure for their property. The article implies almost guaranteed success if the Seller signs a sole mandate, this is absolutely not the case, and is made up of several other factors including correctly valuing a property for the current market.

    Lastly, any professionally agency would get an agreement in writing with their Seller, regardless whether an open, dual or sole mandate.

    This article seems pretty one-sided in my opinion. The question I have is would Remax turn down an open mandate because they don’t feel it is worthwhile?

    • David A Steynberg 10th August 2017

      Good points Grant! Thank you for weighing in 🙂

  • Tes 12th August 2017

    It is in my opinion very misleading…perhaps Remax are talking about how they operate if they get an open mandate…they should just simply say they dont want open manadates and stop spreading the wrong perceptions for sellers because they are interested in sole mandates. The matketing of a property also has a lot to do with exposure and if 3 people are marketing that property is more likely going to reach more people because it is presented in 3 different angles…regarding the price i say do a valuation first and not overprice the property and you will get a best price..a correctly priced property sells faster than one where seller is speculating.
    Lastly some big agencies will almost always advise they will get an above market price to lure sellers to sign a sole mandate.

    E&OE.. from a phone..

  • Hannely 12th August 2017

    I agree with Grant and Tes. As a RE/MAX proffessional I would never rank / neglect any seller. Rather walk away if you are not prepared to commit 100%

  • Ashley Habib 16th August 2017

    Fantastic reading xx Fantastic everything!!! Love this changing landscape!!

    I agree to a point that open mandates are generally not always in the sellers favour. To the point – a SM is meant to allow the agent TIME to negotiate the BEST OFFER!!

    However – there are agents who typically overprice and fail to price counsel along the way and the enthusiasm that was apparent at the initial point of contact becomes diluted – the agent cannot deliver or execute for various reasons and it’s the seller who ultimately pays the price! Time is money – and although 90% of my listings are SM – I will still seize the opportunity to market an open mandate PROVIDED the price is right and the seller is properly qualified. And what’s to stop the agent from converting the OP to a SM? It’s all about EXCELLENT CUSTOMER CARE!!

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