One of the biggest mistakes the seller of a commercial property can make in South Africa today, says Tony Clarke, Managing Director of the Rawson Property Group, is to open up the mandate to more than one agent.
“Despite the fact that sole mandates are widely believed to be the only way to achieve a successful sale in the residential property sector, commercial property owners are inclined to believe that the more agents they appoint, the better their chances are of finding a buyer.”
This, says Clarke, is flawed thinking for one simple reason: the commercial properties which sell the fastest and attain the best prices are those which have been most widely advertised and publicised.
“If an agent knows that he is sharing the mandate with others he will be reluctant to spend anything on advertising it. He will probably list it online and send it to his client base, but that is as far as he is likely to go. He will then sit tight and hope that the right buyer materialises.”
“What is more, if and when such an agent gets an offer (which in nine cases out of ten will be substantially below the asking price), he may well try and persuade his client to accept it so that he not only gets the commission but also makes sure that a rival agency does not notch up the sale. The buyer, knowing that he has no competition, is also likely to stick to his low offer.”
If, however, the mandate is awarded to one agent and one only, that agent, says Clarke, will be ready to spend heavily on promoting the property. He will also not rush the one or two offers to the client unless they are at satisfactory levels. Instead he will wait for more and build up a competitive spirit among the potential buyers, which will result in at least some of the offers being raised.
Awarding a sole mandate is by far the best way to sell a commercial property in SA today...http://t.co/mP1YjUHpFf
— RawsonPropertyGroup (@RawsonGroup) November 12, 2013
“All our experience,” says Clarke, “shows that a single agent is likely to give the commercial seller the best deal – and it should be added that the same applies in renting commercial property. Here, too, commercial rental agents operating on a sole mandate basis have time and again proved to be the most effective.”
