When selling a home, prospective sellers often view the decision of how many estate agents to appoint simply as a question of exposure. But according to Pam Golding Properties chief executive Dr Andrew Golding, the mandate selected can influence far more than how many agents have access to the property – it can shape a number of important aspects to consider including, pricing, marketing, buyer engagement and accountability throughout the transaction.
For homeowners preparing to sell, a choice can be between appointing one agent on an exclusive mandate or allowing several agents to market the property on a so called ‘open listing’. While an open mandate may appear on the face of things to offer broader exposure, Dr Golding says the residential Real estate transaction is often counterintuitive and that this question of an exclusive or open mandate is a prime example of this.
“Bearing in mind that in almost every case the objective is to sell the property in the shortest possible time at the highest possible price, while some properties may sell quickly, depending on price, location and other factors, the entire sales transaction process can often be protracted and can take six to nine months, or even a year. Like with any important business transaction, one needs to make as informed a decision as possible.”
Dr Golding says an exclusive mandate establishes a clear business relationship between the seller and agent, with most importantly, defined responsibilities and accountability throughout the sales process.
“With an exclusive mandate, there is a mutual commitment from the agent to engage in the activities around selling that home in a responsible and committed way, with accountability. And that’s a key part of it,” says Dr Golding.
For the seller, this provides a clearly defined point of responsibility for coordinating the various elements involved in a property sale, from establishing an appropriate pricing strategy and implementing the marketing campaign to engaging with prospective buyers, managing negotiations and navigating the practical requirements as the transaction progresses.
“There are literally hundreds of touch points through the course of a real estate transaction, often with many twists and turns and changes in the market,” says Dr Golding. “There are also numerous skills that are required of an agent, including negotiation skills, knowledge of the market and an understanding of what is needed to fulfil all of those needs.”
Creating competition where it matters
Golding says one of the key considerations for sellers is where they want competition to occur.
“As a seller, what you ideally want is to create competition among buyers. But with an open mandate, you can end up creating competition among agents instead.”
The distinction is important because selling a property involves considerably more than finding someone interested in buying it. It requires appropriate pricing and positioning, an understanding of the local market, targeted marketing, consistent engagement with prospective buyers and the ability to manage negotiations as interest develops, and ultimately, successfully conclude the sales transaction.
The agent’s role may also need to evolve in response to buyer feedback and changing market conditions, making continuity an important consideration throughout the sales process.
A relationship built on trust
The appointment of an estate agent is also fundamentally a relationship decision, says Dr Golding, given the value and personal significance of the asset involved.
“You are trusting someone with usually a very significant asset, so it’s really about getting to know the agent and feeling comfortable that you can engage with them in a relationship built importantly on trust.”
An exclusive mandate provides a contractual framework for that relationship, with the agent taking defined responsibility for the sale and the activities required to bring it to fruition.
This includes developing and implementing an appropriate marketing strategy. As prospective buyers increasingly research properties across multiple platforms and sources of information, marketing requires considerably more than simply placing a listing online.
“Marketing has become increasingly sophisticated and requires a lot of communication, strategy and thought,” he says.
For sellers, this means that the selection of an estate agent is an important decision in its own right. Rather than focusing solely on the number of agents who will have access to a property, homeowners can consider factors such as the agent’s experience, knowledge of the local market, negotiation skills, marketing capability and approach to communication.
Treat the sale as a significant business transaction
Dr Golding believes homeowners could benefit from applying the same level of consideration to the appointment of an estate agent as they would to any other significant professional or business transaction.
“If I were pitching a large financial deal in a professional environment, I would expect to see a director or senior professional involved. We’d be talking about proven processes, accountability and strategy,” he says.
Ultimately, the choice of mandate is about more than determining how many agents can market a property. It establishes the framework for the relationship between seller and agent, including the level of commitment, communication and coordination expected throughout what can be a lengthy and complex transaction.
For homeowners preparing to sell, Dr Golding recommends discussing these factors openly with prospective agents before signing a mandate. Understanding how the agent intends to price, position and market the property, how buyer interest will be managed, and what level of communication can be expected, can help establish clear expectations from the outset.
For further information visit www.pamgolding.co.za
