Whatshot
Prime Property
Prime Property
Date: 2019-06-21
This can be confusing. In analyzing the choices we can interrogate the activity and results that follow. The logic behind the joint or open mandate is that somehow this covers a wider audience so as not to cut any agent out as even the smallest agency may find a buyer or tenant.
The seller is hoping for a frenzy of activity around their property as the agents compete for the sale, because they know if another agent sells or rents the property, they will earn nothing. In these circumstances all that matters is securing a transaction and the actual price or rental rate achieved on the property is completely and absolutely irrelevant to the agent.
The agent is more likely to try and convince the Seller to accept any offer presented, regardless of how good the offer may be. The interests of the agent and the property owner are not aligned.
The agents are now competing against each other at the Seller's expense. The first loss to the Seller is the quality of presentation of their property in the public domain and the second loss is that pricing is driven downwards.
As agents rush frantically to try and secure some measure of first mover advantage the images are of poor quality, the copy writing dismal and the overall presentation poor and in many cases even different across the various agencies on the same property.
The professional agencies in the market will still present the property well, but will rightfully allocate no marketing resources beyond the very basic listing service to the property, as these scarce resources are correctly reserved for their sole mandate properties.
As Gary Player is often quoted as saying that you only get one chance to make a first impression, Sellers should fully understand what a first impression means when taking a property to the market and why this is important. The senior executives at South Africa's leading property portals - PrivateProperty.co.za and Property24.com, will show you statistics of the number of views of a listing as it progresses through its life-cycle. An initial spike is achieved as a new listing is revealed to the market, which then trends downwards over time.
The above is in stark contrast to a well-crafted marketing plan, professionally executed by an experienced agent who is enjoying the privilege of time afforded to him or her under a sole mandate environment.
The mandated agency has a good chance of earning a return on their efforts and is therefore more inclined to apply more expensive marketing techniques, such as professional photography, videography, drone photography, e-brochures, paid for featured listings on the main portals and print media channels.
This is basic risk/reward decision making at work.
The agent's and Seller's interests are perfectly aligned. As the agent earns a percentage of the gross selling price, their fee is higher if a higher price is obtained and if they have time and the opportunity to discard low offers in anticipation of higher offers over the marketing cycle. The agent now behaves more like a Seller.