Understanding The Types Of Estate Agent Mandates And Their Respective Terms
One of the most important purposes of signing an estate agent mandate is to create a binding agreement between the estate agent and the seller that sets out the terms of the arrangement agreed upon to market and sell the property.
This contract helps eliminate any unnecessary confusion as the mandate clearly stipulates the terms agreed upfront by both seller and agent. It establishes the commitment between the agent and the seller and compels the agent to provide his or her best efforts to sell the property in question. Depending on the terms of the mandate, the agent will also most likely provide regular activity reports, keeping all parties informed of any new developments.
The information included in a mandate
Depending on the type of mandate agreed upon between the parties involved, a mandate would usually specify the following information:
The duration of the mandate;
The purchase price;
The specific terms and conditions of the mandate;
The instruction to render a specific service in respect of the particular property, and
An arrangement on the payment of the estate agents commission
The types of mandates
Sole mandate: A sole mandate is where one estate agent is given exclusive rights to market and sell the owner's immovable property. This type of mandate protects the seller from a double commission claim and allows a clear and strategic plan to be put in place for the marketing and exposure of the property. A sole mandate also provides for greater security, privacy and protection for the property as access to the property is controlled by one agent, making arrange suitable viewing times simpler.
Joint mandate: In this case, the rights to selling a property are entrusted to more than one agent at different agencies. With more than one agent marketing the property, there is likely to be greater exposure of the property on the market, increasing the chances of finding a suitable buyer quicker. The commission paid on the sale of the property is split between the agents, regardless of who sells the property based on the agreed terms of the mandate, meaning that there is no extra cost to the seller. While there are notable benefits to this type of mandate, it is important to ensure that the efforts of all estate agents involved are well coordinated and that there is good communication to give the best chance of success.
Open Mandate: An open mandate allows the seller to work with multiple agents without restriction and offers the advantage of not being 'locked in' through a contract with specific agents. However, the risks of uncoordinated or duplicated efforts need to be managed carefully to ensure the greater marketing exposure is harnessed effectively.
Choosing the right kind of mandate for you will depend on the particular situation surrounding the property sale, but understanding what benefits and risks are associated with each can go a long way to making an informed decision.