How To Select The Right Mandate For Your Property
How do you select the best mandate for your property, especially in a slow or downward market? With the property market fairly slow in the region currently, properties are staying on the market much longer than usual. This applies for both properties for sale and rental properties. It is thus not only important to work with the right agent or agency, but to also enter into the right mandate agreement with your estate agent or agency. This will definitely help your property get off the market quicker. So just what should you be considering when signing a mandate agreement? We look at the types of mandates typically available on the Zambian real estate market and their potential pros and cons.
An open mandate is basically an agreement in which the property owner may enter into agreements with multiple agencies to let or sell a property. Any agency may market the property, including the owner themselves. The main attraction here for property owners is that any agency may bring in a customer and they are not tied down to any agency in particular. However, the downside of this is that many agencies may restrict their focus and resources on marketing of open mandate properties as opposed to sole or exclusive mandate properties.
For this reason, you may only want to opt for an open mandate on residential rental property rather than property for sale. Certain rental properties may benefit from the “free for all” buzz that you may get from an open mandate. However, higher value rental properties and commercial rentals will benefit more from the increased focus that a sole or exclusive mandate tends to bring out from any rational agency.
The sole mandate agreement grants only one agency the rights to market and sell or let a property. Under a sole mandate, the property owners may also market and sell or let their own property. In layman’s terms, this is a somewhat closed agreement for a set time period.
The obvious benefit to the property owner here is the added incentivised effort on the agent’s part with a limited amount of time to deliver. While some owners may see this as limiting the potential reach of the property, it is actually the opposite. Agents typically collaborate and more so on properties under sole or exclusive mandates. The agency has some sense of closed interest in the property, it is therefore in their best interest to ensure the property is sold or let during their time-limited mandate. This in effect benefits the property with increased focus and marketing resource input from the agency. Which in terms means a wider reach than under an open mandate, provided you are working with a competent agency. As a property owner, you might want to opt for a sole mandate for properties for sale, commercial rentals and upmarket or specialist residential rental properties.
An exclusive mandate is essentially closed to the agency to market and sell or let. The difference between a sole and exclusive mandate is that not even the property owner may be involved in marketing and selling or letting of the property under an exclusive mandate. The benefit to the property owner is the same as under a sole mandate with some extra benefit with the right agent engaged.
Typically, exclusive mandates work best for any properties for sale especially upmarket property that needs more focused marketing demanding fairly more resource input on the part of the agent. Exclusive mandates will also work well for rental property that may be under a property management agreement with the agent. Exclusive mandates basically give a sense of greater part-ownership in the interests of the property on the part of the agent. This “psychological” boast should in effect mean hands-free residual income for the property owner when the right agent is engaged. Exclusive mandates are best for commercial properties, specialist properties, new developments going on market, and basically any property owner that is looking for property management for their property portfolio. Perfect choice for co-owned properties that may require more focused attention from a third party.
Not sure about what mandate suits your property? Talk to us today and we will give you honest and market-driven guidance in your best interests.