|
|
Which mandate to choose when selling your house
Sole mandate
This is where the seller appoints a single estate agent to market and sell the property. No one else may market the property or introduce potential buyers to it without the approval of the appointed agent, explained Tony Ketcher, MD of Seeff Properties, Randburg.
As they have the exclusive right, it is implied that the estate agent will work hard and spend considerable amount of money marketing the property knowing that they will be reimbursed for the time, money and effort once they sell your property, explained Johnson.
Any agent who is purporting to sell your property should put in the same amount of effort and expenditure into the process, irrespective of the option, maintained David.
She noted that a sole mandate is a restrictive option that is difficult to get out of. “Even in the case of poor service from an agent, you are still bound by the mandate until that time period expires.”
In addition, if a friend or family member would like to buy your house (normally you wouldn’t have to pay commission in this case), you are legally obliged to refer the buyer to the agent and pay the rate stipulated in the mandate, explained Johnson.
David warned sellers to look carefully at the terms in the mandate. “Do not assume the pre-printed mandate is not
negotiable - it is,” she added. -
The terms include the time period, attorney and commission rate. Many sole mandates are signed for three months but sellers can choose to be bound forjust one month. In addition, you are not obliged to use the attomey linked with the estate agency.
David said that many sellers also think the standard rate of commission (7,5% of the purchase price plus VAT) can’t be adjusted. “I don’t deny that work is involved in selling a house but the rate is unduly high - it must be commensurate with the effort involved.”
An agent can sell the house on the first show day, she added.
Joint mandate
Two or more agents are appointed to market and sell the property. Johnson explained the commission is shared amongst the agents, who negotiate with each other on how to split the commission and market the property.
These negotiations aren’t always civil and could result in commission disputes.
Whereas a sole mandate has to be in writing to be binding, this option can be given in writing as well as verbally, said Ketcher.
Johnson said the advantage to this otion is the seller having access to a larger pool of buyers, but one agent can be appointed and not perform but still expect a share of the commission.
There is also a type of joint mandate where the agent that sells the property keeps the full commission, he added.
‘There is considerable risk for the agent in that they could spend time, money and effort, only to see the property being sold by the competitor,” explained Johnson.
He added that when agents compete to sell a property, they work for the sale, not for the best price, and will take any offer to the seller, and convince the seller to accept it.
No mandate
The seller does not sign anything but gives authority to any agent to sell the property.
‘There are no consequences and you are not bound by any agreement should you decide to take the property off the market even if you were presented with your original asking price, and you are free to change your asking price on a whim at any point in time” maintained Johnson.
Often, there is commission dispute if more than one agent shows the property to the same buyer, said David.
Johnson reckoned the property might be over-exposed and look like a circus flagpole with all the show boards.
“Some buyers take this as a sign of desperation or that there is something wrong with the property and either refuse to view or pitch in low offers,” he added.
|
Posted on Wednesday, February 28, 2007 (Archive on Saturday, March 31, 2007)
Posted by hayleym Contributed by hayleym
| | Return |
|
|
|