When it comes to selling your property, which is better; open mandate or sole mandate?
A mandate is the instruction to a real estate agent with regards the commission. When a seller instructs an agent to sell his property for commission and the agent agrees, a mandate has been formed.
The question then arises as to whether a seller should use more than one real estate agent in order to sell their property faster. There are pros and cons to whichever choice you make.
If your property is listed as an open mandate, this means that any agent who has received a mandate from the seller may market and sell the property in exchange for commission. A seller in their private capacity may also attempt to sell the property. If a property is open mandate, no agent may claim the sole right to sell and market the property.
With so much competition to sell the property, most agents will be incentivised to sell the property at a lower price, just to make the sale. The sale may often be rushed and low-profit which is not great for the seller.
There is also such a thing as ‘double commission’ whereby it is not clear to determine which agent effectively made the sale. Most agents will not go all out and advertise a property that is under an open mandate.
As the name suggests, no one except the seller and the sole agent may market and sell the property. This gives a focused point of authority but unfortunately means that the house may take longer to sell.
A plus for the real estate agent is that whether the seller sold the house or not, they will receive commission. It is usually the agent who makes the sale anyway, but this is a nice perk. A sole mandated real estate agent may also informally share the listing with other trusted real estate agents for a cut of the commission. Do not fret; you will not have to pay double commission should another real estate agent make the sale, nor will you receive increased communication from other agents – you will still only communicate with your sole real estate agent.
One or many real estate agents?
So which one should you choose to sell your property? This can depend on certain circumstances. Do you need to sell the property immediately? Or do you have time to wait for the price you would like in order to make a comfortable profit?
A sole mandated listing saves you from having to pay double commission when it is not certain which real estate agent as in fact responsible for the sale. Likewise, if you make the sale in your private capacity (a rarity) you will still need to pay the real estate agent commission for all their efforts in marketing, show days and appointments in order to sell your property.
A real estate agent can market from anything from a couple days to two years, so ensure that you do your homework when selecting a real estate agent. Great real estate agents give your listing maximum exposure and waste no time in getting people through the doors to view your property.