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Mandates explained

A mandate is an instruction from a client to an estate agent, to render a particular estate agency service. It is a legally binding contract between an estate agent and client, that need not be in writing unless in the case of a sole and exclusive mandate, or a power of attorney to conclude certain transactions on behalf of the client. It is always better to record mandates in writing anyway.

The various mandates can be explained as follows:

Open mandate
Many different agents can have a mandate to market your property, meaning that one estate agent cannot claim to have the sole right to market the property.

Sole mandate
This means that the seller cannot confer a similar mandate on another estate agent before expiry of a determined period. If another agent sells or lets your property during this period, the estate agent with the sole mandate may claim damages from you, which may be equal to the commission that he could have earned if he had sold the property. However, you can sell or let the property yourself without any implications during this period as long as you make sure the wording in the mandate does not state that the estate agent has “sole and exclusive selling rights” or “sole right to sell” or “sole authority to sell”.

Sole and exclusive mandate
Nobody (including yourself) but the estate agent holding the sole and exclusive mandate, is allowed to market your property within the period of the mandate. This means that should anyone other than the mandated agent sell your property, you will still have to pay commission to the estate agent.

The agent, to whom the sole and exclusive mandate was given, is still entitled to his commission if he introduced a buyer to your property during the mandated period, depending upon the wording of the mandate document, and this buyer only purchases your property after the expiry of the mandate, perhaps through you as the owner or through another agent. It is important that you read and understand the terms of the mandate.

There are benefits to signing a mandate with an estate agent:
• It gives the agent time to secure the highest price.
• It is safer to have a limited number of people through your home and the mandated agent will ensure that the prospective buyers are “for real”.
• It creates a moral commitment between the agent and the seller and motivates the agent to sell your property.
• The agent should provide you with regular updates.
• The agent is more eager to spend his advertising budget on your home.
• You avoid the risk of double commission claims.