often no more than a verbal instruction to an agency to find a buyer
further commitment on the seller's part. The verbal open mandate
from the need to sign any mandate documents, but is the least effective
marketing. Do note that even of all you are prepared to committ to is
an open mandate, it is still preferable to have this in writing to
avoid disputes later.
agents are reluctant to actively promote an open mandate property in terms of
advertising and show days, because they know the door is always open for a
competitor to step in with a buyer after all their hard work and promotional
It appears attractive and non-committal, but agencies obviously don't like
doing business like this - and with good reason. The most professional and successful sellers will
brush aside open mandates. It's always a question of quid pro quo - value for
value. If you are looking for a professional agent to deliver a professional
service, the open mandate will probably not be favoured. Commitment is a two
homeowners have had bad experiences with Sole Mandates, the problem was
invariably not with the mandate, but with the agent they chose.
WHAT IS AN
mandate is simply the oral authorization a seller gives an agent to market a
property. The real estate agent has the right to market the property on the
terms the seller instructs.
open mandate the sellers have the right to appoint as many other real estate
agents to market the property as they wish, or even to sell the property
privately. Open mandate sellers usually appoint several agents to market their
also has the right to withdraw an open mandate at any time, for whatever
reason. So, real estate agents with only an open mandate can be fired whenever
the seller feels like it.
what is probably so appealing to most sellers about open mandates: They have
the right to appoint as many real estate agents as they want and have the right
to cancel the mandate whenever they feel like it. The idea obviously is getting
replacement agents if the one chosen to work with in the beginning proves
Agencies have varying cancellation policies in place, but at Property
Network we are so sure of our service levels, that we allow a 7 day
cancellation period on our sole mandates - so if you are unhappy with
the service you are getting, you can appoint another agent quite
THE AGENT WORK FOR WITH AN OPEN MANDATE
works for the seller, even with an open mandate – not the buyer, although in
practice this may not seem true.
is the person that appoints the agent to market the property. The agent’s
commission gets paid out of the purchase price for the property – the seller’s
money. And the agent has an obligation to represent the best interests of the
person who mandates him/her – the seller.
practice, some real estate agents forget who they work for. Maybe because
they’re in such competition with other agents to sell the property that they
see the goodwill of the buyers as their only edge over those other agents. Point
is, if something goes wrong, who are you going to blame? If you have more than
one agent, how are you going to keep track of what they do and say about your
MANDATES AND CONTROL
several agents have an open mandate, it becomes almost impossible to control
the marketing, viewing and confidentiality.
Who was it
that advertised your property for R50 000 less than you instructed? Who was
responsible for telling every Tom Dick and Harry about your need to sell
quickly, despite your instructions not to?
know. It wasn’t me!”
Who was it
that first introduced the buyer to your property? Can you absolutely say that
it was the same agent drawing up the contract? When you start asking the money
questions, there suddenly might be more than one agent with their hands up! Who
will you pay? Or will you end up paying both?
of control due to lots and lots of open mandates can result in the seller being
liable for paying double commission!
Add to that, the fact that no one agent knows what the other buyers
opinions are so no-one including you, has a proper picture of the
market feeling toward the property. How do you change your marketing or
pricing strategy without this vital information?
are prepared to keep a proper filing system and keep accurate track of all
agent enquiries…. well the consequences speak for themselves.
sellers assume that more agents automatically mean more buyers – and a higher
selling price as a result. But that’s not true. The truth is – buyers hunt
houses, they don’t hunt agencies! Buyers are looking for a house that suits
their needs. If your house is marketed correctly, the buyers will know about it
and come to you.
property and the facts about the property is what gets buyers interested enough
to make an appointment. If the property fits the buyer’s needs, and the price is
right, a good agent with training in negotiation skills will be able to close the deal. Question is, if you have committed to
nobody, has anybody committed to you? Who is going to spend time, money and
effort in implementing a marketing plan so buyers know your home is available?
that a thousand real estate agencies have a right to market your property is
not going to interest potential buyers. The only possible advantage of having
more real estate agents marketing the property might be that the advertising
exposure may be more than with a single company. But not always, simply because
most agencies will not spend money on extensively advertising an open mandate!
advertising, some agencies will not even have a show house, or even place a for
sale sign in front of an open mandate house. Those actions might attract
buyers, granted, but it will definitely attract the competition! The agent with
an open mandate is forced to try and keep the property a secret as long as
possible, to try and find a suitable buyer before some other agent gets the
only get paid for a successful sale. So, when several agents market the same
property, they are competing to find the first offer that the seller accepts.
They are not looking for the best offer, just the first one. An unscrupulous
agent might even pressure the seller into accepting a poor offer! This is
called the “hard sell”.
MANDATE OVER EXPOSURE
grant many open mandates, the agents will show your property to every buyer
sounds great, doesn’t it? Most people get excited about this. But actually,
this means that buyers who are looking for a totally different kind of
property, or worse, buyers who can’t afford to buy, get dragged to your house
on the off-chance that they might be interested in making an offer.
buyers who are looking for something totally different reject your property
immediately, because it’s not suitable, or simply because they get ticked-off
with an agent who drags them to places they don’t want to see! And once a buyer
rejects a property, they don’t come back later.
buyers that cannot afford your asking price will also either reject your house
immediately because it is too expensive, or make low-ball offers – the only
offers they can afford to make – in the hope that you’re getting tired and they
get lucky. Your open mandate agent now comes and tries his/her best to try and
sell those low offers to you, with convincing “evidence” that you are
overpriced. And you can’t really blame the agent – remember, he/she only gets
paid if they’re the one that gets your signature on a contract of sale! The
inter-agent open mandate competition works AGAINST you.
agencies have for sale signs on your lawn, your property appears in every
second agency’s newspaper ad, and hordes of unsuitable buyers have traipsed
through your home and rejected it, it is in danger of getting “over exposed”.
This is just a nice way to say that you may seem desperate to sell. And seeming
desperate is never good for your sale – even if your are.
of potential buyers have come to view your house, and nobody bothered to buy
it, does that mean something is wrong with it? If you could start thinking like
that, how can buyers not think it? And if something is wrong with the house,
and everybody’s already rejected the house, then you must be desperate to sell,
right? Also consider that most good sales take place within 4 weeks of listing –
after that interest and value diminishes.
in the first attempt at selling, commitment, professionalism and extensive
marketing – or pay the price.
MANDATES AND YOUR SANITY
you know that open mandates mean more work for you – keeping track of the
agents’ activities and tracking all visitors by agent. Already enough to stress
you. But subconsciously, there are other issues which impact on your mental
health and can add unnecessary strain to your selling process.
never feel comfortable about accepting an offer at lower than your asking
price, even if it is the best offer you’ll get, because you won’t know what the
other agents are busy with.
agents are competing and you don’t have firm control over each agent’s progress
in selling your house, a much better offer might come around in the hands of
another agent, at the exact time you are getting bamboozled into signing a poor
one by this agent! You’ll always wonder… should I wait, should I phone all the other
agents out there. Sad, but true! Open mandates will make you paranoid.
ON OPEN MANDATES
known truism says,, “An open mandate makes your house everyone’s listing, but
nobody’s responsibility but your own.”
you will take responsibility and still be paying commissions.
being said, Open Mandates have worked for some people and can still work under
certain circumstances. Those people however are few and far between and the
circumstances not definable.
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