Where's the opt out clause on sole mandates?
Why do people hesitate to sell homes on sole mandates?
It is mostly because they don't like being tied in. However, the fact remains that the sole mandate way of selling a property is still the best route to market - as well as to achieving a best sale outcome.
From the agent's perspective, it's a choice simply driven by economics.
On a sole mandate, the agent has a 70 to 80% chance of success. Conversely, when a property is given to a number of agents on an open mandate, the agents' chances of selling it are diluted to less than 20%.
Quite simply, none of the multiple agents working on an open stock mandate would normally apply themselves properly. Instead, their efforts will tend to be focused on where they are likely to achieve a result - and commission - off course they will focus more on their sole mandates. But where is the opt out clause on sole mandates? We're in the age where the consumer rules.
Sole-mandate agents should always offer an opt-out clause that allows the seller to cancel the mandate if he or she is unhappy with the agent's performance. That provides for a win win scenario.
This is what the contemporary home seller/consumer expects.
Granted, there will always be home owners who tend to be nervous about being tied up in a sole mandate and ending up with an agent who doesn't perform.
That is why an opt-out clause should be a standard feature of sole mandate selling.
Agents must be measured against the structure and delivery of their marketing plan. And, if they don't stack up to that plan, the seller should have the ability to cancel the mandate.
Accurate Pricing is important
The other important point is that the sellers should price the property accurately i.e. at the lowest price that they are prepared to accept in the prevailing market circumstances. The nature of the current market virtually demands that.
Meanwhile, it is simply naïve for estate agents to advertise at inflated prices providing 'wiggle room' on price in what is now one of South Africa's historically most difficult home sell climates. It will not present the house as more buyable relative to other homes that are advertised.
As a seller, the best approach is to be firm on a bottom line that is market related. Hold that line rather than keep giving way on price.
Meanwhile, home sellers must be aware that it is not uncommon for some agents to inflate 'achievable' prices in order to secure the mandate to sell. There will always be a question mark over the likely outcome of this dubious approach.
Inflating a home sale price, and relying on web responses to deliver a buyer, is naïve - to say the least.
Author: Ronald Ennik