There seems to be a growing trend towards joint mandates being given by sellers. A joint mandate is a mandate that is given exclusively to 2 or more estate agencies to market a property.
This differs from a sole mandate, which is given to one estate agency. The estate agency commits to market the property and works for the seller to obtain the highest possible price in the market.
So why would a seller consider a joint mandate? Generally, it’s because they don’t feel comfortable entrusting the sale of their home to just one real estate company. They feel they may miss out on buyers that other estate agents are working with, and they feel that if they list with 2 or 3 companies they will get more marketing.
The reality, though, is completely different. The first point to appreciate is that there is only 1 pool of buyers out there. These buyers don’t belong to any real estate agency. They are just buyers. They may have an agency of choice, but irrespective of this, they will contact the estate agent that has the property listed that they want to see. That’s a given fact. I’ve never in my 25 years of real estate met a buyer who refuses to see the property they may want to buy just because their estate agent friend isn’t able to bring them to see it. Buyers follow houses.
The 2nd misperception is that, when listing for 2 or more companies, you will get more marketing. The best estate agencies know how to market a property well to attract all the buyers. They will commit, in writing, to a marketing plan and invest a significant amount of money advertising your property. If an estate agent isn’t prepared to commit in writing to a marketing plan on sole mandate, then don’t list with them. Pick an estate agency that will.
When you list with more than one company by joint mandate, the estate agents reduce their marketing, because they are at risk. So you may have 2 or 3 weak marketing plans, instead of 1 effective one.
But the biggest reason why a joint mandate is detrimental to a seller is that you are forcing your selected agents to sell your home at any price – not at the best price. Why?
If any of the joint mandate agents get an offer they will motivate that you accept it – not because it’s the best offer, but because if you don’t accept it, one of the other joint mandate agents may sell it and then they earn no commission.
Contrast that to a sole mandate agent. This agent works for you to obtain the highest price. If a lower offer comes in their job it to approach all other buyers who’ve shown interest to see if they want to offer. You often get multiple offers – where buyers make their best offer to secure your home. And isn’t that what you want as a seller?
There is no downside to a sole mandate with a reputable agency that executes a strong marketing plan to attract all buyers, and then negotiates for you to get you the best price. Joint mandates do the opposite. Your choice.
Principal, Harcourts Platinum
Director, Harcourts South Africa