Page 22 - Selling your Home - The CommFREE guide to all you need to know

OPTION THREE: SOLE MANDATE WITH AN ESTATE AGENT

This arrangement is the most common in South Africa. A single estate agent is
authorised to market your property and, when the property is sold, the agent is paid
regardless of who sourced the buyer (although it is usually the agent).

This is the best mandate if you have a great agent, and the worst choice if you have a

poor agent! Your choice of estate agent is therefore critical.

The estate agent who has the mandate with you may often market your property
informally with other agents whom your agent trusts. If one of those estate agents refer
a buyer to your agent, then they will usually get a share of the commission from your
agent.

However, this arrangement is not your concern and you only have to deal with the single
estate agent you appointed. Your agent retains control of the selling process and you
won’t get calls from other estate agents.

Strictly speaking, unless the mandate specifically states otherwise, if the seller him- or
herself finds a buyer then no commission is payable to the agent. However, normally a
sole mandate will 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.
There is often a statement that if the estate agent introduces a buyer during the
mandate period, but the buyer only purchases your property after that time, then the
agent will still be entitled to commission.

As the seller it may seem unfair that if you find a buyer yourself then the estate agent will

still earn a commission. However, in practice, it is likely that the buyer only found out
about the possible sale of your property from the agent’s advertising campaign or the
For-Sale sign outside your house. If the mandate is not “sole and exclusive”, the estate
agent would have to bear the risk that someone sees the advertising and then
approaches the seller directly.

There are thus valid reasons why a “sole and
exclusive” mandate is fair to the estate agent.
In return, since the seller is “locked in” to using
the services of a single agent, that agent must
repay the seller’s faith by conducting a effective
marketing campaign and finding a buyer.

It is critical for you, as a seller, to choose only
the best estate agent who is great at

marketing, client service and negotiating.

22
22 Title of the book
The CommFREE Guide to Selling your Home