Sole Mandate the high road to best-price home sales in 2017
Category Blog
Selling on sole mandate is, and has been for at least the past 30 years, the home seller’s best route to achieving optimum price in uncertain economic and socio-political conditions such as the South African residential property market now faces.
And it has seemingly become even more so with the added effect on sentiment of the SONA fiasco in Parliament earlier this month; the even bigger question mark that now hangs over the presidential succession issue; an inevitable, and seemingly imminent, Cabinet reshuffle; the as yet unresolved challenges of corruption and State capture; sky-high unemployment; and a persistently struggling overall economy…with the prospect of a global ratings agency downgrade hanging over its head.
Against this background, higher end home sellers who bypass the benefits of the sole mandate route could end up sacrificing up to 10% of the achievable sale price of their residence in the current market.
At the same time, they could find themselves mired in unwelcome legal issues – not to mention frustrating delays – if competing agents on open mandate end up locking horns in court.
A time-consuming problem
A typical example is when an agent does a deal with a buyer who was originally introduced to the property by a different agent. Unravelling the problem legally would inevitably be time-consuming.
In the current, virtually flat-lining home market, buyers will generally tend to pitch their offers low – but can nevertheless be encouraged upwards. This is best achieved under sole mandate.
One of the biggest pitfalls for an open-mandate seller of property is the risk of each competing agent trying to cut the best deal for his or her buyer and, in the process, undercutting each other – to the detriment of the seller.
By comparison, sole mandate marketing is generally a clinically smooth and uncomplicated process, because the mandated agent is able to create a forum of competition among buyers by way of a carefully planned and focused marketing strategy that is implemented unimpeded, and with rifle shot precision.
Sole mandates first
In the real estate agency sector generally, it is a fact that the most successful and professional agents in the upper end of the residential property market will, first and foremost, focus their daily attention on their sole mandates. They will seldom venture voluntarily into the open mandate arena – and, at times when they are obliged to do so, their attention span will be short.
Meanwhile, the open mandate agent will do little more than take a buyer to a property and then present the offer that is made which, inevitably, will not be the buyer’s best price. This is because no platform of buyer competition has been created by the agent, who cannot afford the time to do so on open mandate.
The reality is that, from the listing of the property all the way up to the transfer process, a multitude of decisions, initiatives and actions need to be undertaken to secure a best-practice outcome – a sale at optimum price.
This goes way beyond the reach of open mandate marketing.
Author: Ronald Ennik
