Is a sole mandate a soul mandate?

04 Feb Is a sole mandate a soul mandate?

Let us just remind ourselves, that we generally get three main types of mandates when dealing with clients in real estate:

1. Open mandate – this is a mandate that the client can give to as many property practitioners as possible. It can be given verbally by the client and does need to be in writing;
2. Sole mandate – this is a mandate that the client can give to one property practitioner only. In other words, the client agrees that the mandate will only reside with one property practitioner for the period that the mandate will endure.  However, bear in mind, that the client could sell or let the property themselves with a sole mandate; and a
3. Sole and exclusive mandate – this is mandate where the client agrees that the property practitioner is the only person who may sell or let the property.

So, what’s all the fuss about???

It is important for a property practitioner to explain the implications of a mandate to a client.  A client should understand, the risks involved in using open mandates.  Anyone who is looking to buy or rent a property, is likely to contact more than one property practitioner to see what stock they have that would be suitable.  It is therefore very possible, that a potential buyer may have viewed a property with Property Practitioner A, but purchased the property through the agency of Property Practitioner B.  This may have double commission implications for the seller with the seller potentially having to pay commission to both Practitioner A and B.

Any property practitioner must ensure that a seller understands these risks and use this explanation as a means of communicating to a potential client the benefits of signing a sole and exclusive mandate.  It surely makes sense, that if a property practitioner is going to commit to the client in terms of time, effort and resources, that the client makes a likewise commitment by agreeing to enter into a sole and exclusive mandate with the practitioner.  The client ensures that they have a committed property practitioner marketing their property and also there is no possibility of any double claim for commission.

A sole mandate is therefore good for the soul of both the seller and the practitioner.  They are both equally committed to each other and the client increases the chance of a successful transaction, which is ultimately why they approached the property practitioner in the first place!

Mandates are more fully discussed in the FETC: Real Estate programme offered by CPMD.

For more information on all of CPMD’s courses, click HERE