Whether you’re selling a luxury home on a golf estate, or an inexpensive apartment, is it still advisable to enter in to a sole mandate agreement and, if so, would the terms of the mandate differ?
In answering this question, let’s first determine whether or not a sole mandate is required for properties listed in different market segments. The purpose of a sole mandate is to instruct a single estate agency to invest their time and resources in marketing a listing in order to attract strong buyer interest and sell a property at the highest possible price.
This is true irrespective of which market segment you are selling in. The alternative to a sole mandate would be a joint mandate or an open mandate – and in both these instances you are asking agents to sell your property at any price, not at the best price. The reason for this is that, on an open or joint mandate, the agent will do their best to get a seller to accept their offer – not because there isn’t a better offer out there, but because the agent won’t get paid if their offer isn’t accepted. That sadly is the reality.
A sole mandate given to a reputable company that delivers on a written marketing plan and that employs strategies to create buyer competition so that the seller sells for the maximum is without a doubt the best option – in all market segments.
But would the terms of a mandate change for different market segments. Most certainly they would. It’s not a case of “one size fits all”. Generally the length of a sole mandate would be determined by the average selling time in that specific price range for that specific property type. In a market that moves slower or where a unique property attracts a very small buyer pool, a sole mandate would run for longer than for other listings.
The marketing strategy and strength of the marketing would also vary. It would make little sense for a real estate company to spend the same budget marketing a R 1 million property as they would a R 10 million property – although sadly this does occur when listing with the wrong agency. A skilled agency would tailor a marketing plan to attract the right buyers for the correct market segment. You’d hardly find a R 10 million buyer on Gumtree – but you may source the right buyers through powerful print, online, video and Virtual Reality marketing.
It’s important to remember that the kind of marketing that is used on your property will position it in the market. If not done correctly, your property won’t be correctly perceived. The result is that you won’t attract the right kind of buyers and you’ll sell for less than market value.
When selecting your agent, be sure to determine if they are proposing a solution appropriate for your property – one size does not fit all.