OPEN VS EXCLUSIVE

Owners of property constantly ponder over this question, whether or not to appoint just one agent to market the property or just open up to as many agents as possible . Before we go into the actual thought in the decision making process it is important to understand the definition of an Open and Exclusive Mandate or Listing.


Open Mandate
Open Listing means to appoint as many agents as you please to work on the marketing of the property. The owner executes an open listing with more than one real estate agent and pays the agent who brings an able client whose offer the owner accepts.

Disadvantages of an Open Mandate

  • Less time is spent on marketing the property
  • Less money is spent on advertising the property
  • Higher security risk
  • More disruption of owners/sellers privacy
  • Agents quoting different rates
  • Various sale ads for same property , creating an impression of a desperate owner/seller
  • Bargaining down of price by a buyer/tenant dealing with different agents on the same property
  • Duplication of buyers/tenants and double commission claims

 

Exclusive Mandate
There are many good reasons for the Owner/Seller to sign a Exclusive listing also called Sole Mandate. We know that Owners/Sellers want the most money for their property with the least amount of problems. By dealing with one Agent this can be achieved. It is a fallacy that many Agents will do a better job than one Agent can. All tenants/buyers interested in the property are funnelled through to one Agent who can negotiate with each one and thus obtain the best price.
Exclusive listing is a legally binding contract entered into by the Owner/Seller and the Estate Agent. It gives the Agent the legal right to be the only marketer of the property over a certain period of time and at a price agreed to by the Owner/Seller and the Agent. If Agents are sincere in their determination to rent/sell a property, then there are many obvious benefits which accrue to Owner/Seller willing to sign a SOLE SELLING MANDATE.

 

Advantages of an Exclusive Mandate

  • Statistics prove you will get a better Price by employing a Sole and Exclusive Real Estate Agent
  • Exclusive Sole Agents concentrate their efforts and put more energy into marketing the property
  • They put more money into marketing your property
  • Avoids duplication of tenants/buyers and thus eliminates double commission claims
  • Affords the owner/seller more privacy and security
  • Too many Agents can cheapen the property
  • It provides the estate agent with time to secure the highest price.  
  • It is safer to have a limited amount of people through your home and the estate agent with your mandate will ensure to their best ability that the prospective tenants/buyers are "for real". 
  • It creates a moral commitment between the agent and the owner/seller and motivates the agent to sell/rent your property. 
  • The agent will provide you with regular activity reports.  
  • The agent is more eager to spend his advertising budget on your home.  

Why owners prefer exclusive mandate?

  • owners have to deal with one agency only who in turn works with all other agencies and clients.
  • since house keys are with agent the inspection can be arranged at very short notice.
  • advertising and marketing costs are borne by the agency.
  • flat maintenance and upkeep are the agency responsibility.
  • since all offers received are in writing it helps owners to choose the right buyer/tenant.
  • it will benefit the end result in price if one estate agent controls all incoming offers.