- Hiring an estate agent is essential if you want to smooth out the home selling process, and improve your chances of securing a market price.
- When hiring an estate agent, you have the option between a sole mandate and an open mandate.
- Simply put, a sole mandate provides quality over quantity.
Home buyers and sellers have so many more options available to them nowadays, and it’s important to know what those options are. For example, if you’re a seller hiring an estate agent to market your home (which it is recommended you do), you have the option of a sole or open mandate. Here’s what that means.
The meaning of an exclusive sole mandate versus an open mandate
A sole mandate, also known as an exclusive mandate, means you authorise only one estate agent or agency to market your home.
An open mandate means that multiple agents or agencies will be able to market your home. When you see multiple advertisements posted for the same home, it’s usually because the seller has provided an open mandate.
Sole mandate rules: Is it a binding agreement?
Yes, the sole mandate is a contract signed between you and your estate agent, with terms and conditions attached. Withdrawing from it will incur penalties.
The sole mandate must be a written agreement, with the seller’s signature included. The estate agent is required to explain the legal ramifications of the agreement, and they must also supply a copy of the agreement to the seller.
How long is a sole mandate valid?
In most cases, sole mandate expiry will occur after 90 days. However, a specific expiry date can be included in the agreement.
Should you sign a sole mandate? Yes, and here’s why
Simply put, it’s quality over quantity.
It may seem intuitive that more agents marketing your properties mean more opportunities to sell them. However, that is not the case.
Advantages of a sole mandate include:
You have the security granted by a signed contract
In the case of selling a home, it would be to your benefit to have a contract in place. You wouldn’t have alterations done to your home without signing a contract with a builder, so why would you hand over the responsibility of selling your home to someone with whom you have no binding agreement?
An agreement provides security that is to the benefit of both parties.
You’ll get a better price
When multiple agencies are marketing a property, each wants to beat the others to the punch. This means they are focusing on selling the property more quickly, rather than for a better price.
With just one agency, their priority is to get the best price, and they’ll have time to do a comprehensive valuation of the property that enables you to set a price in line with the property market, with less risk of over or undervaluing it.
You’ll only pay one commission
Playing agencies against each other in the hope of getting them to lower their commission rates will backfire. You get what you pay for, and if you agree to pay one agency the commission at their required rates, they will put more time and effort into marketing and selling your property for the right price.
You’ll get a better-quality marketing campaign
It’s said that too many cooks spoil the broth. Well, this applies to estate agents as well. If you’ve got multiple agencies marketing the same property, there’s no coordination, and it will result in a confused and ineffective marketing campaign.
Put one agency in charge, and they’ll run a marketing campaign with all the correct gears in place. Provided it’s a good agency, of course.
You won’t have to keep track of multiple agencies. You’ll be receiving updates from a single agency rather than having to answer multiple phone calls. You won’t have to keep all the information provided by different agencies in mind.
Sole mandate vs dual mandate
There is also the option of a dual mandate, which as the name suggests, authorises just two agencies to market the home (as opposed to multiple agencies).
A dual mandate is preferable to an open mandate, as the process will be less haphazard with just two estate agents conducting the marketing process. However, the two agencies will still feel the need to compete with each other rather than sell the home for the best price, so a sole mandate is still preferable.
Ensure you’re hiring a quality estate agent
We’ve shown that a sole mandate has many advantages, but it makes it more important that you choose a good agency. Here’s what you should look out for:
- Track record. Ensure the agency has a good track record of selling homes, preferably in the neighbourhood where your home is located.
- Ensure that the group is licensed, and has the official qualifications.
- Read testimonials by clients, which should be easy to find. Check reviews of the agency on websites such as hellopeter.com.
The benefits of an estate agent
Whether you’re a seller or a buyer, there are many reasons to hire an estate agent. They smooth out the process and help you get the best price on your purchase or sale.
A home loan comparison service, such as ooba Home Loans, is also useful in this regard. We help home buyers secure the best deal on their home loan by submitting their application to multiple banks.
We also offer a range of tools that can make the homebuying process easier. Start with our Bond Calculator, then use our Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.
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