There are many people who do not know the difference between a sole mandate and an open mandate and therefore, when it comes to selling their property, they often make the wrong decision which they later regret. It is important to be properly informed before selling your property and know exactly what each mandate entails. There is an old saying that says that moving is the most stressful thing you may ever do in your life. One of the biggest stresses is the delay in the sale of your property. Everyone would like to sell their house quickly and for the full asking price, so then what is the best option between a sole mandate and an open mandate?
Sole Mandate – A sole mandate is when one estate agent has exclusive rights to sell your house within a specific period of time.
Open Mandate–an open mandate allows your property to be marketed by many estate agents at the same time, with the one making the sale getting all the commission.
Advantages of a Sole Mandate:
- Your property is more likely to be sold for your asking price.
- You will receive a higher level of service as it is the agent’s sole responsibility to sell your property.
- You will receive a greater commitment from the agent as they are guaranteed a commission upon the sale of your property.
- You will not have to worry about commission claims from other agents.
- The process will be simplified as you will only have to deal with one agent and have one mandate signed.
Disadvantages of a Sole Mandate:
- You are tied into a contract with the agent for a set period of time, therefore you need to ensure that you choose your agent wisely.
Advantages of an Open Mandate:
- Your property may get more exposure as you have numerous agents marketing your property.
- Your property may sell quickly.
Disadvantages of an Open Mandate:
- The price of your house will generally sell for far less than your asking price as the agents want the sale to go through as quickly as possible. Often even below market value.
- You may be exposed to the risk of paying double commission as disputes may arise concerning which agent introduced the buyer.
- The agents’ service may be poor as they don’t want to spend a lot of time and money on selling your house as there is no guarantee they will be the agent to sell your house.
- Agents may start undercutting each other on both price and commission just to get a sale.
- Buyers will see an open mandate as desperation so they may hang on a while to get a bargain.
- The different agents may advertise your property for different prices.
I recently helped a friend of mine in making his decision on whether to appoint one agent or have an open mandate when selling his home. In his mind, the more agents he could appoint, the better his prospects would be to sell his house. He was thankfully able to make an informed decision before binding himself to an open mandate which did not suit his circumstances at all. I would only recommend an open mandate if your property has been on the market for a long period of time and you are dissatisfied with your agent’s attempts to sell it. Sometimes, it may not be the agent at fault but rather poor economic conditions, lack of demand in the area or the price you are demanding being simply too high. An open mandate may assist you in exposing your property to a wider market, but don’t expect miracles in getting the price you want! You will also have to ensure the period for your sole mandate has expired before entering into an open mandate.
If you are still unsure of what the best option is for you then drop me an email and we can discuss it.
