Mandate matters
Category Advice
Are mandates mandatory? Let's get to the heart of the mandate matter!
Giel Viljoen, Principal at Leapfrog Stellenbosch, jokes: "If property professionals earned an extra 1% in commission every time they were asked why mandates are important, they would go on very different holidays!"
A sole mandate - also known as an exclusive mandate - is an agreement whereby the seller of a property gives one selected agency the sole right, or mandate, to market and sell the property.
It may seem counterintuitive to do as one might expect that it makes more sense to give multiple agencies the opportunity to sell the property, but here's why a mandate matters.
"A mandate helps to keep the process focussed and devoid of unnecessary complexity. It helps to avoid the duplication of potential buyers and the risk of double commission claims," Viljoen explains.
What's more, when more than one agency is designated to market and sell the property it easily leads to disputes and disagreements about the pricing of the property, which in itself can have far-reaching consequences.
"The seller is the client and ultimately agents work to ensure the best outcome for the client and when you have too many metaphorical cooks in this particular kitchen it becomes difficult to achieve the desired result - which is selling at the best price in the shortest time - for the client," Viljoen elaborates.
Important to note is that the mandate agreement must be in writing and should stipulate the length of time the mandate applies for, the selling price of the property, the commission structure agreed upon, as well as any other terms and conditions pertaining to the sale of the property.
"At the end of day the mandate is to streamline the selling process and to make it a pleasant one for both the seller and potential buyers. I always encourage clients to ask as many questions as they need about it - transparency is key to making clients feel comfortable," Viljoen concludes.
Author: Leapfrog Property Group
