This is where the seller or owner of the property wants many agents marketing the property without a fixed contract period.
Features of open mandates include:
- ONLY the estate agent that delivers the customer, gets paid any agreed commission.
- Many agents get involved in marketing and advertising of the property which could increase the chance of a deal happening.
- It is usually favours the customers since many agents will be competing for his business.
- Agents usually work harder to be THE first to get a customer although some may not market the property actively if they feel putting in work may potentially get no gain.
- It is not uncommon for agents to pressure the seller or owner into accepting a biased offer just so they can clinch the deal and earn the commission.
- Sellers or owner may have concerns dealing with many potential customers brought through the number of agents.
- Agents displaying too many ‘For Sale’ signs show up outside the property may give the property an unfavourable impression.
- It is also possible for multiple agents to claim the deal. Although there is no need to issue multiple mandates, it is advisable to agree in writing, the terms of the mandate to market the property. This reduces the incidence of any misunderstanding later.
It may a good idea to choose maybe no more than 3 agents. This ensures freedom from a fixed period contracts yet have a manageable number of agents marketing the property.
In this case, the owner or seller engages a preferred agent and then authorises perhaps, through a ‘letter of authorisation’, (or may indirectly agree for) the agent to advertise the property to other agent or agencies.
Features of Multi-Agent mandates include:
- In practice, the commission earned is split between the original preferred agent and the one that found the customer although this may often involve these other agents contacting the owner or seller directly if they think they have a potential client.
- More activity through many agents competing to find a customer leading to greater exposure of the property in the marketplace
- The original agent may demand a higher commission percentage since there is a chance of splitting commission with another agent.
- As with open mandates, the agents may try to pressure the seller or owner to accept an offer from a customer which they have sourced, even though that may not be the best offer
- Multiple property viewing from unknown agents can be a problem.
- The original agent and indeed, other agents in the deal may become complacent knowing that other agents are doing the work and still share a commission not necessarily worked for.
- This type of mandate can lead to less accountability of how well the property is genuinely being advertised or marketed.
- This type of mandate leads to more passive marketing rather than would be the case for a sole mandate or an open mandate with only a few agents.
Sole Agent Mandate
In this case, a single estate agent is engaged and he or she gets the commission regardless of who or how the customer was sourced. It usually involves signing a fixed period contract, for example, 3 months.
A Sole Agent Mandate is a good opportunity for the smart property agent to showcase his capacity in marketing the property effectively in order to earn the negotiated commission.
The best agents employ best practice industry standards and tools easily available to market a property including networking and even using free advertising online through popular sites like www.p-zed.com.
Features of Sole Agent Mandates include:
- The appointed agent usually is in control of the viewing enquiries.
- Strictly speaking, the seller or owner may choose to find a buyer or customer himself and pay the agent nothing unless the mandate signed stipulates differently.
TIP: It is a good idea to include wording (such as “sole selling rights”) to make it “exclusive”, which means that even if the seller finds a buyer then the agent will earn commission. Also see my blog on Sample Mandate template. Read also, ‘Tips for a smarter mandate’
Finally, in opting for Sole Agency Mandates, the owner or seller must ensure he chooses the most suitable agent for the best results. Doing this from start, perhaps helps to reduce the incidence of a bad experience.
It may be worthwhile to contact Zambia Institute of Estate Agents (ZIEA) for a list of Agents registered in the area.
You also visit our Facebook page (Property Africa to like us) or just send an SMS to +260 968 677 699.
For more of our useful blogs, click https://property-zm.com/blog/