It’s a big decision that every seller has to make: how do I list my property for sale? By Sole mandate, Joint mandate, or Open mandate?
Here’s the brutal truth regarding each option. Naturally, you’ll have to interview the agents you are considering to ensure what their individual offering is – but this should guide you.
Open Mandate – this is when you list with many different real estate agencies and you have no commitment to any of them. Some sellers think this will give them access to a wide range of buyers, and that the agents will be motivated to work hard for a sale. Nothing could be further from the truth.
If you give no commitment, you’ll get no commitment. That means you’ll get the absolute minimum marketing, you’ll be listed online my multiple companies (often at different prices), and you’ll be sending a message to buyers that you have no plan and that you’re open to anything. It’s the worst possible selling method. I’ve almost never seen a great result when it’s been used.
Joint Mandate – when a mandate is given exclusively to two or more agencies. It’s used by sellers who want commitment – and who believe that they will be exposed to more buyers, and receive more marketing by listing with multiple agencies. The reality is that the marketing will be very average. Agencies won’t invest what’s needed when they have no assurance of a sale.
The same applies to their level of commitment. They will be motivated to get your listing sold – but sold at their price, not at the best price. They’ll push for you to accept their offer for fear another agent has a better offer and they don’t make the sale. They’re really not on your side. It’s a very bad strategy to employ if you want your agent to work for you to achieve you the best price.
Sole Mandate – where an exclusive mandate is given to one agency. This is always the best selling method to use – but only on 3 conditions. Firstly, the agency must commit, in writing, to a strong marketing plan. You need to be convinced that all the buyers will see that marketing and find your listing. When properly done, a single agency can reach the full buyer pool.
Secondly, you need to be assured of their commitment to provide you honest feedback and good service. Without this, you won’t know what you need to do to get your listing sold. This also needs to be in writing.
Thirdly, you will need the sole mandate to specify that, should the agency not deliver on their marketing and service promise, you can cancel the mandate. That way you are at no risk of being let down by empty promises.
There is convincing evidence that a sole mandate is the very best way for a seller to achieve the maximum price the market will pay. Your agent is committed to you, and the agency employs significant resources to ensure you attract the best buyers, create competition, and sell for the price you deserve.
Principal, Harcourts Platinum