There is a misconception that putting your property on an open mandate with more than one agent will generate interest from more buyers. In truth, agents tend to operate from the same pool of buyers.
5 Advantages of a sole mandate:
- Agents working off a sole mandate offer a greater level of commitment to the Seller as they are guaranteed to be remunerated when they successfully close the deal.
- A higher level of service is achieved through sole mandate as the agent is essentially employed by the Seller. The agent will exhaust all means to pursue qualified buyers. They will price council the Seller and review their marketing strategy on a regular basis, agents tend to return calls faster and provide feedback regularly.
- Sole agents are accountable to the Real Estate Company they work for. They are closely monitored by their Senior Manager and receive the best support from their marketing department to ensure that maximum exposure is given to result in a successful sale.
- Sellers do not have to worry about claims from other agents for commission.
- Properties are more often sold at a higher price through sole mandate.
5 Disadvantages of an open mandate:
- Open mandates will cause agents to fight over your property, not buyers. Agents will undercut each other on commission and price in order to close the deal.
- There is no control over how the property is marketed and how it is represented to the market. Real Estate companies are reluctant to spend money on agent’s marketing campaigns for properties that may not see any revenue. Buyers start asking questioning. “Why is the property on with so many agents?” “They must be battling to sell?” “There must be something wrong with the property!” “Why is the price different with this other agent, are they desperate?” “Let’s wait and see if the price drops even further, there might be a bargain to be had.”
- Agents hired under open mandates tend to start off full of zealous, however, this enthusiasm quickly diminishes. They are generally not keen to put in the effort and their level of service can be weak.
- It has been proven that properties on open mandate often finally sell below market value.
- Open mandates expose Sellers to the risk of paying double commission. When agents deal with the same buyer and one agent closes the deal, the other agent may claim against the Seller based on effective cause for initially introducing the buyer to the property.
Here is another article that explains the tricks that some agents get up to under open mandate.
Contact Donna now to find out more information with regards to mandates and any other property related questions.