So why would you, as a seller, entrust the selling of your property to one estate agency on sole mandate? Would it not make sense to list on an open mandate, where many companies can bring buyers to your listing?
A seller may be thinking that, in order to get the maximum exposure to the most buyers, it is best to list with as many companies as possible. It might sound like a logical conclusion – but the reasoning is faulty, and the conclusion is wrong. Allow me to explain.
There is only one condition under which a buyer will pay their maximum for a property – and this is when they have to compete for it against other buyers. In order to achieve this buyer competition it is important for a seller to ensure that the marketing of their property attracts the right buyers to their listing.
The “right” buyer is a buyer who is looking in the correct price range, has requirements that are met by the listing, and has the financial ability to purchase the property.
So where do we find such buyers? Buyers do not belong to estate agencies. There is only one pool of buyers out there and they search for property in a number of ways: print marketing, Internet and website marketing, video, showhouses, and boards, to name but a few. None of these methods can be ignored. The better the marketing, the more of the right buyers will be attracted.
The reality is that this marketing comes at a significant cost to the estate agent. It is simply impossible for an agent to commit the resources required to attract these buyers to a listing if they do not have the security of a sole mandate.
On an open mandate the best that an agent could do would be some basic website marketing, the odd print advert, a board, and showhouses. This marketing is weak. Is it not part of a specially designed marketing plan tailored to attract the right buyers. And whilst it may attract some buyers, it will certainly not attract enough to create strong buyer competition.
The other problem with open or joint mandates is that the agents involved will compete to get your property sold for any price, not the best price. If they get an offer they will urge you to accept it, not because it’s the best offer out there, but because if you accept another offer from another agent they will earn nothing.
Does it really make sense to select a selling strategy that doesn’t allow the estate agent to commit the resources required to attract the right buyers and create buyer competition? It makes even less sense to put agents in a position where their motivation is to sell your home at any price so that they earn a fee, rather than the best price.
On the other hand a sole mandate with an estate agency that commits, in writing, to a professional marketing plan and invests their resources in attracting the best buyers makes perfect sense. It costs you no more. All that’s required is commitment. Commit to a sole mandate with a professional estate agency and sell for more.
Principal of Harcourts Platinum, and Director of Harcourts South Africa
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