Effective Strategies for Securing Sole Mandates in Real Estate
Learn the nuances between sole and exclusive mandates, along with dual, joint, and open mandates in the real estate industry. Discover key tips for agents in acquiring sole mandates, including how to prepare for meetings, build rapport with sellers, and identify motivated sellers. Understanding the seller's reasons for selling is crucial in determining the potential for securing a sole mandate.
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RE/MAX Acquiring a Sole and Exclusive Mandate Training 6 February 2020
What is the difference between a Sole and Exclusive Mandate? Sole only one agent, seller can market personally. Sole and Exclusive seller cant market personally. A Sole or Sole and Exclusive mandate must always be in writing verbal means nothing.
What is the difference between a Dual, Joint and Open Mandate? Dual only two agencies. Joint a specific number of agencies but only those agencies. Dual or Joint mandate must always be in writing verbal means nothing. Open any number of agencies, unlimited. Can be verbal. But in writing is always better.
The agent must believe that it is in the Seller s best interest to give a Sole Mandate: S Must have a sole mandate presentation, personalised. Must always focus on the benefit to the seller. Must practice and know your sole mandate presentation. Sole mandate presentation must sound authentic, not rehearsed.
What to take with you/ prepare? Lightstone of property. Camera. Sole Mandate Presentation/ Marketing Plan. Look Professional, be well dressed. Be on time. Wear your name badge. Make sure you are meeting with the registered owners as per Lightstone. Try to see husband and wife together. Sole mandate document/ contract to be signed by Seller. Listing card.
When you arrive: Introduce yourself to seller. Shake their hand. Look them in the eye. First walk with them through the property. Chit chat, complement, build report while walking through, win their trust. Try to establish the reason for selling, ask the owner why he is selling, or ask them where they will move to when the house sells. Ask as many questions as possible. Make Notes. Pay attention to detail. Ask why they bought the house the next buyer will probably buy for the same reason.
Decide if this is a motivated seller? What is the reason for selling? Is it one of the D s? Divorce Distress Departure Death The reason for selling is the most important determining factor if you want a sole mandate or not.
Then sit down preferably at dining room table: Ask the financial questions such as monthly levy, rates and taxes. Fill in your listing card, make sure you get all information needed, focus on detail such as type of tiles, type of wood, kitchen tops etc. Try to establish if seller has a price in mind. Do your calculations to get to a market related price. If seller s expectation is too high ask him how he got to his price. Explain how you got to your price. Together decide on a realistic marketing price.
How to calculate market value of a property: What did seller buy for? What is the municipal valuation? Did they add value to the property? How much did they spend? Full value can t be added, only about 50 %. Annual increase of about 2% per annum if bought within the last 5 years. Most recent 20 sales as per Lightstone. Look at Lightstone valuation. Price per m2 (based on m2 of house). What is currently in the market? The competition. What does this house compete with. Buyers buy by comparison. They will buy the property that offers the best value for them. Agent s gut feel would you pay this much for this property? Factors that might decrease/ increase the asking price highway noise, only 2 bedrooms etc. Remember replacement value is not market value. Also explain that market value is the price that a willing and able buyer is prepared to pay at a particular moment in time. It can change from week to week. If house next door goes on auction. Always give market value within two parameters. About 10 15 % variance.
How and when do you ask for a Sole Mandate? If the price is right you always want a sole mandate. If the property is overpriced then the reason for selling becomes the most important factor. If this is a motivated seller take the mandate even if the property is overpriced. If not a motivated seller and overpriced you do not want the sole mandate.
Introduction line to your Sole Mandate presentation: Mr. Seller I believe it is in your best interest to give a Sole Mandate to one agency/ agent whom you trust, as this is how you will achieve the best price for this property. Let me show you why I should be the agent that you employ.
Why is it in the Sellers best interest to give a Sole Mandate? Platform of competition between buyers. A higher price can then be achieved. Create fear of loss amongst buyers. Show houses / open hours also work well for this. Give examples of where you achieved the highest price per m2 or best price in complex/ street on sole mandate because you managed to create a platform of competition.
Same pool of buyers: No unlimited pool of buyers. At any moment there are only a certain nr of buyers looking in this area, in this price range, now. We focus on quality marketing. Your house will be advertised everywhere. Buyers are not loyal to a brand. If they see the right house they will buy it. With our marketing all willing and able buyers will be aware of your property and they will contact me. All buyers will then come through me. I will be able to create a platform of competition. Not one buyer through agency A, second through B etc. In this case agents work for buyer and not the seller. Buyers must compete for your property, not agents.
One focused marketing campaign: Same message is sent into the market. Only one price, not one agent trying to undercut the next agent with price. If one agent advertise for less it undermines the platform of competition that another agent is trying to create because buyer just sees the lowest price.
A commitment for a commitment: Mr. Seller if you commit to me I commit to you. I will allocate a fair portion of my marketing budget towards the marketing of your property. You make me responsible to sell your home. I am answerable to my sole mandate sellers. My sole mandates are first priority properties on my stock list. You will become my first priority.
No risk for double commission claims: For example one agency brings the wife and a second agency the husband. Or uneducated buyers look at the same property through 2 different agencies. Both companies claim to be the effective cause of sale and feel they are entitled to claim commission from the Seller. Puts the Seller at risk.
Security: Do you really want an unlimited nr of agents to have access and bring buyers to your house? Empty houses leave lights on, leave doors unlocked, no control, the one agent blames the next.
Advantages of a show day/ open hour: House can be staged. Interested buyers can view at same time creating a platform of competition. Buyers see each other, less likely to offer a lower amount. Fear of loss. Buyers can bring their experts family members, builders, architects etc. SA market trained to looked at houses on show on Sunday from 2 5. Less inconvenience for Sellers preparing house for each buyer. More people in shorter period of time. Buyers can discuss house freely as Seller is not in earshot. Neighbors can come and look. Neighbors are best ambassadors for area, in similar social economic circles as your potential buyer, they have invested interest, more people in the property, often have friends, family and acquaintances looking for property in the area.
Why is RE/MAX the best option? Nr one estate agency in World and in South Africa. We outsell our competitors 3 to 1 in South Africa. Most agents in SA - +/- 2500 agents, 200 offices, network of agents working together. Aware of buyers being transferred. Trusted brand. Makes buyers feel comfortable. Red, white and blue balloon is one of the most recognizable logos in the World and in the real estate industry. International exposure. 100 000 agents internationally in over 100 countries. Leads from all over the World. Superior marketing. Discourages bargain hunters. Experienced, productive agents. Average RE/MAX agent has 12 years real estate experience. A RE/MAX Agent sells a property every 30 seconds somewhere in the Wolrd. TV and radio advertising campaigns. Nr 1 real estate franchise globally and nr 11 overall. Top real estate website www.remax.co.za Nr 1 in sales and nr 1 in agent count in SA and in World. Nr 1 in giving back to the Community. RE/MAX Foundation in SA. 15 % National market share.
Why is RE/MAX Infoglobe the best option? Nr 3 Multi office in South Africa. Top real estate agency in Pretoria. Biggest real estate agency in Pretoria. Highly visible outdoor marketing campaign throughout Pretoria. +/- 100 Agents working together on your property on our Multi Listing System. Xx Years of real estate experience behind me. 2 Offices working closely together, Pta East and Centurion/ Midrand. Continuous weekly training, experts in real estate field. Internal professional photographer with top skills and equipment including video and drone. Internal legal support. Panel of 5 top attorney firms. Large database of qualified buyers. Central office location 477 Mendelssohn, close to Menlyn Main. Strong support network: attorneys, bond originators, town planners, direct bank channels, electricians etc. Voted Best Estate Agency in Pretoria by Rekord Readers Choice Awards 5 years in a row.
Why am I your best option? My outdoor marketing campaign/ visibility in area. My experience. My market share. My negotiating skills. My business model working by referral I show every weekend. My database of buyers/ CRM system. My qualifications Logbook, NQF 4, PDE, valid FFC. How I give back to the community. If you are new to the industry you will focus on RE/MAX SA and RE/MAX Infoglobe success as per previous two slides. Above all else a Seller will give you a sole mandate because they trust you. This is most important.
Service Guarantee: In the unlikely event that we fail to give you any of the above guaranteed services, let us know. If after giving us 3 days to rectify the situation you are still not satisfied, you may give us 1 day s written notice to cancel the sole mandate.
What is my marketing plan for your property? Refer to our marketing plan, sole mandate vs open mandate.
Sole Mandate: For how long: Mandate document says 180 days standard, if the seller doesn t bring this up leave period as per template 180 days. If you know beforehand expensive house, over R 3 million change mandate contract to 12 months. If seller wants to discuss this further: Price range up to R 1.5 million 3 months mandate R 1.5 R 3 million 6 months mandate R 3 million up 12 months mandate Explain to Seller that this doesn t mean that it will take that long to sell the property but this is usually how long our entire marketing campaign takes. Also explain that the more expensive the property the fewer buyers and this is why we need a longer mandate on a more expensive house. Also explain that the house might sell in the first week as we work with a database of buyers and the property will first be offered to our existing database of buyers. This doesn t mean the house is too cheap or the sale was too easy.
Commission percentage: This always comes up when negotiating your sole mandate. Mr Seller we always list at 7.5 % plus VAT but this percentage is negotiable to a certain degree when we have an offer on the table. Try not to discuss the commission % further at this point, remember when we have the offer we negotiate differently. Mandate document specifies commission as 7.5 % plus VAT or % to be negotiated, try to leave it like this.
Sole Mandate Objections? 3 Percenters If they are so flexible on their commission they will be even more flexible when it comes to negotiating your sales price. Attorneys selling real estate. Not expert in the real estate sales field. They make their money on the transfer. Force you to use them for the transfer process. You get what you pay for. No budget for marketing. Agents that buy the mandate with high valuations over value property to get mandate, then cant sell it. Only does damage as best time in market is the first month when house is still fresh in the market. Sole after sole previous agent did not produce. Focus on why they didn t produce. Was it because the house was not marketed property, then this is easy to overcome with your marketing plan. Was it because house is over priced. Then they didn t do their job in terms of price counseling. Ultimately they did not do their job as they did not sell the house in the mandate period.
Pre-empting problems: Other agents will phone you saying they have buyers. This is usually a technique to just list the property. Usually they don t have buyers. But please refer them to me. In the unlikely event that we are not already working with the buyer we will gladly do a commission split with the other agent. We will not stand in the way of a sales deal. Explain that some weeks you might bring a couple of buyers and other weeks you wont bring any. Market is unpredictable. We will not just bring lookers. We will only bring qualified willing and able buyers. Not impress the seller with nr of feet brought through but rather quality buyers. Feedback will give you written feedback after every buyer and also e mail you copies of all marketing done on the property. Constant communication with the Seller. Whatsapp group.
Viewing arrangements and contact details? Ask seller when will be most convenient to bring buyers through. Get at least two contact numbers and an e mail address for feedback. Book show houses or open hours in advance. Leave your business card, marketing plan and sole mandate presentation with Seller.
Then you must produce: Do exactly what you have promised. E mail seller a copy of the sole mandate ASAP within 24 hours. Set-up Whatsapp group ASAP Ask permission to put For Sale board up in front of property. Put sole mandate sticker on. Send photographer to do photos, video, drone footage ASAP. Feature property on websites (Property 24, Priv Prop and Remax) Give regular feedback, constant communication with seller. Price counsel when necessary. Give feedback after every buyer. Send seller details of all marketing, link on website, show when featured, show when advertised. Try to show property at least once per month or arrange an open hour at least once per month. Invite your database to show house or open hour. See seller face to face once per month, after one month s marketing. Price counsel if necessary.
