Sell Mumbai Property – Sole Mandate vs Open Mandate
Before we get into the actual debate of sole mandate vs open mandate, let’s clear what they mean.
Meaning: Sole Mandate or Exclusive Mandate
Sole Mandate or Exclusive Mandate are legal contracts wherein a single real estate agent or firm is authorized to market the property on behalf of the owner. Sole mandate can be for lease or sale. The property owner cannot market the property through his personal resources. Sole mandate contracts are time limited. They normally range from 3 months to 1 year.
Meaning: Open Mandate
Open Mandate means the property is open for sale or lease by all and any agent. The property owner is free to approach as many real estate agents as he wishes to. The property owner can sell or lease the property himself also.
Needless to say, most Mumbai real estate agents prefer sole mandates. However, Mumbai property owners have a different perspective. They are under the impression that more agents marketing the property results in more exposure. Thus, their property will sell quicker. Mumbai property owners are also apprehensive. They do not want to tie themselves down with one real estate broker. Their concern is that the real estate agent might not focus on their property. Nothing is far from the truth than that.
A reputed real estate agent will ensure that a sole mandate property is marketed fully through all channels. They will focus more on the sole mandate property. It is a time limited contract. Any goal oriented real estate agent knows that he has to close the deal on the property. The owner will not renew the contract if he doesn’t close the deal within the time period. The real estate agent will ensure the property owners gets maximum price. After all, the more money the owner makes, the more commissions he is going to make. More than anything else, a sole mandate property is assured commissions for a real estate agent.
Open Mandate: Estate agents compete each other
An open mandate gives several real estate agents access to the same property. Agents will compete against each other to ensure that they close the deal before someone else does. As a result, property owners believe that their property will close quicker. However, what actually happens is, each estate agent tries to ‘throw’ and ‘push’ the property to all and every buyer in the market. They hope and pray that one of the buyer closes the deal. The whole process is fruitless for the property owner. All it does, is bring several unqualified buyers to your property. It is probably beyond the buyer’s budget. Few of them will eventually land up giving an offer, which is below the market price for a reasonably priced property.
In an open mandate, offers received are scattered and isolated. Only the owner is aware of the offers. Competing real estate agents who are unaware will continue giving similar low offers. As a result, few owners start doubting their price strategy. Eventually, the owner might accept an offer lower than his expectation and below the market price. He might not be aware that another agent might be dealing with a buyer giving a higher offer.
Sole Mandate: Buyers compete other buyers
In a sole mandate property, offers are qualified and filtered through one professional estate agent. The owner is ensured that an offer once rejected will not be back on the table again. A buyer once rejected because of his offer does not come back around through another real estate agent. The offers received by the owner are streamlined. This creates competition between buyers. Competition between buyer fetches the best price for the property and the owner.
Often, in open mandate, real estate agents quote varying prices. One real estate agent might quote lesser than other real estate agents to attract the same buyer. This creates confusion in the mind of the genuine buyer. They start doubting the property. Genuine buyers perceive the property to be a quick sale or even worse, a Distress Sale. Sole mandate agents eliminate doubts and create exclusivity. Buyers perceive exclusivity positively. It creates a value of quality over quantity.
Today’s internet age buyers are savvy. They have unlimited research tools on their finger tips. Property owners have to make their choice wisely. Sole mandate agents work hard to close a deal. They use their experience and expertise to appropriately price the property. They device and implement a marketing strategy. They keep rogue real estate agents at bay. They convince genuine buyers for the right price. They work in close co-ordination with the legal advisers to ensure legal agreements are not one sided. They work with government authorities to register the document. Sole mandate is a wise choice!