In India, especially in tier-2 and tier-3 cities, it’s common for multiple brokers to work on a single real estate transaction when properties change hands. This often leads to confusion and inefficiency. As a result, sellers and buyers may experience miscommunication, delays, and even missed opportunities. To streamline the process, it’s crucial to introduce clearer methods of working with brokers. One such method is the Exclusive Mandate.
In most advanced countries, particularly the United States, Canada, and Australia, Real estate Brokers work with exclusive mandates, also known as exclusive listing agreements. While other types of agreements exist, the exclusive mandate is the most prevalent and often the preferred method for both brokers and sellers.
Advantages of Exclusive mandates provide clarity and guarantee committed, time-bound results. By designating a single broker for the property transaction, this agreement eliminates confusion and ensures focused efforts, offering clear advantages to both the agent and the seller.
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1. Advantages to the Agent
When a broker secures an exclusive mandate, he is assured of compensation if the property is sold within the agreed time frame. This guarantee, incentivizes the broker to invest considerable resources, such as professional photography, virtual tours, and targeted advertising, into marketing the property.
Without this exclusivity, the broker risks putting in all the effort only for another agent or the owner themselves to make the sale, leaving the original broker without a commission. Exclusive Mandates work 9 out of 10 times because they create an environment where agents have a strong incentive to deliver results.
2. Advantage to the Seller
For sellers, an exclusive mandate simplifies the selling process by ensuring there is only one point of contact: the dedicated broker. This focused approach leads to a more coordinated marketing strategy, ensuring consistent updating, discussions and pricing. If multiple agents are involved, sellers risk inconsistent advertising tactics, varying pricing strategies, and a lack of cohesion in how the property is being marketed.
Furthermore, exclusive mandates eliminate the unhealthy competition that arises when multiple brokers chase the same sale. In situations where several agents are competing, the focus often shifts to speed rather than achieving the best possible price for the seller. Brokers may rush the process and in a hurry to succeed undervalue the property or missing out on key opportunities.
- Advantages to the Purchaser
Mandating a Broker for Purchasing brings in excellent results. Need of explaining the requirement to a single person, he finds a few properties fitting your description and taste, since he has an assured mandate, he tries his best to get you the best deal.
Mandated Brokers vs. Influencer Marketing/Advertising
In the past, celebrity endorsements were the main form of influencer marketing. Today, social media influencers, who have mastered the algorithms of digital platforms, promote a wide range of sectors, like lifestyle and luxury, food, travel, health and wellness, including real estate. These influencers can reach large audiences, creating a buzz around properties through lifestyle-focused posts, videos, and advertisements.
Advertisements and influencer content are driven by strategy and data, and while they’re effective at generating a buzz, they lack the personal touch and depth of engagement that only a real estate agent can provide.
Why Real Estate Brokers Are Essential
- Brokers work on success fees: Unlike advertising agencies or influencers, brokers only get paid when the transaction is completed. This results in a higher level of dedication and perseverance, as brokers are driven to ensure the deal closes successfully. In India brokerage is charged from both the parties, it is advisable while giving an exclusive mandate, the brokerage fee is agreed upon and a clause inserted in the agreement that the brokerage will be only charged from the person giving exclusive mandate.
- Brokers have established networks: Brokers spend years building a network of buyers, investors, and industry connections. By tapping into their extensive connections, brokers can pinpoint buyers who are not only truly invested in the property but also possess the financial means to successfully close the deal.
- A broker’s expertise: While advertising campaigns and influencer posts may generate initial interest, brokers engage in tactical, professional selling. They understand the nuances of pricing, negotiation, and buyer psychology, and they’re able to handle inquiries and objections more skillfully than a generic ad or post.
Why Brokerage Should Be Called a “Success Fee”
In real estate, brokers typically earn through a commission structure. However, since they are compensated only upon the successful completion of a transaction, it would be more fitting to call their fee a ‘SUCCESS FEE’ rather than the conventional ‘Brokerage fee’. This term more accurately captures the performance-driven nature of their work.
My Recommendations as a Real Estate Broker
- Do your research: Ask friends, relatives, or business associates for recommendations for a broker or brokerage agency. Check online reviews and verify their track record in similar transactions.
- Interview multiple brokers: Shortlist a few brokers and interview them. Ask about their experience, marketing strategies, and past successes with properties similar to yours in terms of type and market value.
- Offer an exclusive mandate: Once you’ve found the right broker, and you feel he generates trust, offer him an exclusive, time-bound mandate, normally 90 to 180 days, depending upon the transaction value,
Real Estate brokerage is as much an art as it is a science. The right broker understands the intricacies of human interaction, market behavior, and property presentation. They use their expertise to create value, connect with buyers, and close deals effectively.
Website: www.roshanrealestate.com
Cell: 8055005000, 9890200900, 83780 85000
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