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2011 August 11: SOLE MANDATES RIGHT FOR TODAY’S MARKET, SAYS VINEYARD ESTATES CEO

Conditions in the Cape residential property market have, says Anton du Plessis, CEO of Vineyard Estates, caused him to revise his attitude to sole mandates.

“In the old days,” he said, “I would often recommend dual mandates, especially when they involved a big name company and a smaller local agency.

In dual mandates, said du Plessis, the big name brand will work extra hard to ensure that their supposedly superior abilities are not shown up by the small player.  The smaller agency, however, tends to take on fewer properties, and therefore each success and failure is more critical to them.  The smaller player tends to devote more time and attention to each of their properties.  For the agent in the larger company, it may not really be that important whether he sells house A or house B, whereas in the smaller company often has only has house A and one or two other houses to think of.

“The dual mandate involving a large and a small organisation,” he said, “gives the client all the advantages of the big agency’s national reach and advertising coupled to the focus and commitment of the one or two man company.”

It is, however, likely to result in the agent being pushed to make a sale.

Dual mandates, said du Plessis, will, in his view, always be more effective than open mandates where several agents put a relatively limited effort into marketing the property – but often today neither dual nor open mandates are right for the market.

Why is this?

The reason, says du Plessis, is that today’s buyer tends to be “skittish”.  Reading the property and financial media and perusing the major banks’ housing reviews, he is far less confident than the buyers of yesteryear – and he will probably want time to make a decision knowing that there are now many options and many “bargains” open to him.

 In a dual mandate situation, each agent tends to be worried about the other agent bringing in an offer first, and therefore is likely to pressurise a buyer before the time is right.  A buyer who is pushed to make a decision will often feel that the agent does not want them to consider properly all the facts, and that the agent is worried that they will find a better deal elsewhere, and therefore wants them to commit before this happens.

“The last thing a hesitant buyer needs is pressure from his agent.  I recently sold a home after four months negotiation.  It was a very good buy but the client needed time to assess all the possibilities.  If he had been pushed at a premature stage to make a decision, he would probably have walked away from the deal.”

This sort of client is increasingly common today, said du Plessis, and his situation is very definitely best handled by a sole mandate where one agent can take his time without fear of being pre-empted.