Thinking of selling your property?

The type of mandate that you grant to your agent could make the difference between a successful sale in a short period, or your property simply sitting on the market, according to the Seeff Property Group.

For an agent to market your property, the seller is required to grant a Mandate to the agent to market and sell the property. There are generally three types of mandates:

1. Open Mandate – allows the seller to appoint multiple estate agencies to market the property simultaneously. Under this agreement, only the agent who successfully secures a sale by being the effective cause earns the commission. The drawback is that agents may not give it all their attention. There is also the risk of “double commission” if multiple agents claim to have introduced the buyer. Coordination of viewings can be complex.

2. Joint Mandate – the seller appoints multiple agencies to market their property, with a pre-agreed commission structure enabling the agents to share the commission. This type of mandate aims to increase the reach and reduce the risk of commission disputes, but might again not necessarily mean that agents would give it all their attention as it involves sharing the commission.

3. Sole Mandate – this grants exclusive rights to a single agency to market and sell the property for a specified period. This means the seller cannot appoint other agents or sell the property privately during that time without potentially owing commission to the mandated agency.

According to Elaine Vandayar, a sole mandate is an exclusive agreement between the seller and a single estate agency, granting them the sole responsibility to market and sell the property within a specific timeframe.

These mandates are typically for 3 to 6 months depending on the property and needs of the seller. During this period, the seller cannot appoint other agents or sell the property privately without being liable for commission to the sole mandate holder.

She says the biggest benefit is that this exclusive arrangement motivates the agent to dedicate their focused attention and comprehensive marketing efforts towards the property, aiming to achieve the best possible price within the shortest possible time.

Since this is an agreement with the client, she says the agent would focus their attention and marketing efforts to achieve success for the seller, knowing that they risk earning no income if there is no sale. The agent would therefore use all available marketing tools as well as networking to source a suitable buyer and an offer as soon as possible.

Typically, the agent will put together a full marketing plan with regular feedback to the client on the progress, and provide guidance to the seller every step of the way, says Mrs Vandayar.

A sole mandate is a legally binding contract governed by the Property Practitioners Act (PPA) of 2019 and the Consumer Protection Act (CPA) of 2008. To be valid and enforceable, the sole mandate must contain specific information, ensuring transparency and protecting both the seller and the property practitioner (estate agent).

A mandate document must be in writing, signed by both the seller and the agent, and include clear legal details for all parties, the property, agreed asking price, commission terms, special conditions and legalities, as well as an expiry date. It must outline the responsibilities as required by law, and include a signed mandatory disclosure of the condition of property from (later to be attached to the sales agreement as well). It should also include a marketing plan.

Mrs Vandayar says that experience shows that a sole mandate achieves the best results for clients. Typically, it enables the property to achieve a higher price and sell faster compared to the market averages.

Sellers should, however, also be upfront with their agent about their needs. Always consider what the minimum price is that you could accept so that the agent is empowered to negotiate the best outcome.

Issued by Gina Meintjes