H. Completing a Golden Homes Sole Mandate

AGREEMENT GRANTING A SOLE

AND EXCLUSIVE MANDATE

entered into between

Seller (1) ________________________________                Seller (2) _______________________________

Insert the names of the Seller, e.g. David Charles van Wyk or David C van Wyk – always use full first name and surname. The second name can be either the full name or initials. If there are more than two sellers then all their names need to be inserted or a written resolution authorizing one seller to sign on behalf of all the others can be used. This resolution must include all the names of the sellers and must be signed by each one. Consult the notes in the training manual on identifying the seller.

and GOLDEN HOMES – hereinafter referred to as ‘the Agent’

The Agent is ALWAYS the agency and/or its principal. The agent is NEVER the person facilitating the agreement. An estate agent is a representative who represents the AGENT being the Company and the principal they work under.

  1. The Seller hereby irrevocably appoints the Agent who hereby accepts such appointment as the sole and exclusive agent for procuring the sale of the property known as Freehold/Sectional Title Erf ___________in the township of _______________ Situated at __________________________________________________________________________________________________________

Once this mandated has been signed and dated by the seller and the agent, the seller cannot revoke, which means withdraw or cancel, the agreement without the agent’s consent. The seller is also appointing the agent as the sole and exclusive agent and the seller may not appoint any other agents (agencies) to market the property.

 The Erf number and township would be as per the municipal rates account or title deed of the property. This is the legal identity of the property and not the street address. By situated at you give the street number and name as well as the unit number and name of a complex if it is in a sectional title scheme.

  1. The gross price required by the Seller for the property is R ______________________ (______________________________ ______________________________________________) or such other price as may be agreed upon by the Seller and the Agent.

This would be the price at which the property will be marketed and MUST include the agent’s commission. Complete it in numbers and in words.

  1. This mandate hereby granted shall commence on signature of this agreement and deemed to be placed on the market forthwith and shall remain in force from _____________ until ___________

Determine the time frame of the mandate. The dates must be specific calendar dates determining the start and end dates of the mandate. The start date may be different from the date of signature. Never use words like, “to be determined” as this will render your mandate invalid. It is also advisable to do 3-6 months and not longer. Rather re-negotiate the mandate at that time so that you can determine whether or not you want to renew the mandate and continue with the responsibility of fulfilling the mandate.

  1. The Seller shall pay to the Agent a gross commission of _______% (_____________________ percent) of the purchase price.

The commission is something negotiated upfront and should NEVER be negotiated after you have done your job as an agent! Remember, this is your salary, and no one negotiates their salary with an employer after they have worked for them, neither should you. Neither do contract workers, doctors, lawyers, etc., negotiate their fees. Why should you? Make sure your seller understands that this is effectively an employment or contract agreement price which has no bearing on the actual price the seller chooses to accept.

NEVER, NEVER, NEVER, tell a seller that the commission can be negotiated once you bring them an offer! When you bring an offer to a seller and he accepts you have fulfilled your part of the agreement. Now it is his turn to fulfil his and to pay you what agreed to before you started spending your money on marketing his property.

  1. The Seller acknowledges that the agent has explained the meaning and consequences of the material provisions of this exclusive mandate and the specific obligations in respect of the marketing of the property which will be assumed by the Agent.

As an agent, you should have explained the term and conditions of the mandate to the seller. Through this clause, the seller acknowledges that he understands the material clauses, being the clauses above and that he understands what you are going to do in regard to the marketing of the property.

You should have provided him with a “Listing your property to sell” booklet which explains the marketing process the agency does. Note: The agency and its agents are not obligated to do anything more than what has been stated in the marketing booklet.

  1. The Seller undertakes that he shall not during the mandate period sell the property himself or grant to any other estate agent the right to sell the property. Should the Seller do so, the Agent may cancel this mandate and claim damages from the Seller in the amount equal to the commission stipulated in clause 4.

If the seller gives another agency the right to sell the property or he sells it himself during the mandated time, the agent then has the right to cancel the mandate and claim their commission stipulated in clause 4. The agent must first cancel the mandate and notify the seller that they have cancelled it and are no longer liable to continue marketing the property. Thereafter the agent (Principal) can sue for the commission.

  1. If the property is sold by the Agent, the Seller, or any other person, within the mandate period or within 30 (thirty) days after the termination of the mandate period to any person who was introduced to the property during the mandate period, the common law principle of effective cause shall apply.

Sometimes a buyer that viewed the property during the time of the mandate comes back after the mandate has expired and then makes a decision to buy the property. In this case, whether they come through the agent, or go privately to the seller, or come through another agency, within the mandate period or within 30 days after the mandate has expired, the agent (Golden Homes) is still entitled to their commission – regardless of who sold the property!

  1. No variation, waiver, or consensual cancellation of this agreement shall be valid and binding unless reduced to writing and signed by both parties.

No changes can be made to the mandate, nothing can be deemed not applicable, and no cancellation of the mandate shall be valid unless it was put down in writing, either on the mandate or in an addendum, and signed by the seller/s and the agent.

  1. The Agent may put up “for sale” and “sold” signs during the term of this agreement and for 1 (one) month after the sale.

You for sale board is an important part of the marketing process as it alerts potential buyers to the property when they are driving through the area they are looking at buying in. Very often someone will buy the home because they have already accepted it from the outside. They already have an emotional “yes.”

Remember, your board would in this case be the effective cause should a sale take place.

  1. The Seller indemnifies the Agent for any damage suffered as a direct or indirect result of the Property being marketed or shown to prospective purchasers. The Seller shall inform its insurer that the property is on the market and that show days will be held.

In today’s world, you as an agent have no way of knowing who you are dealing with when someone calls you for an appointment. If you take a buyer to a property and they end up stealing goods from the seller, the seller cannot hold you liable. The seller needs to notify his own insurance broker that his house is on the market and that it is open to risk. This will indemnify him with his insurer.

At all times the property belongs to the seller and he is responsible in regard to whom he gives access to, including you as the agent.

  1. The Seller shall inform its bondholder that they have placed the property on the market for sale.

To avoid the possibility of paying early cancellation penalties to the bank the seller needs to advise them of his intent to sell the property and cancel the bond.  The early cancellation means cancelling the bond before the end of its full term of 10, 20, 30 years that the contract was signed for. In most mortgage bond agreements, they have a clause that gives the bank the right to claim penalties because of the interest they are losing due to the bond being cancelled early. This penalty is legal and is generally not more than three months. If a three-month pass between the date they notified the bank and the date of transfer, then there are no penalties payable.

  1. ________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Any additional clauses that are pertinent to the sale of the property can be listed here. Especially if there are things the seller will remove from the property when it is sold. For example, a generator, or chandelier, or gas stove, etc. You also need to note any latent defects the seller is aware of.

SIGNED AT __________________________ ON ________________________________ 20_____

 

____________________________________                     __________________________________

(the Seller/s who declare/s that he/she is authorized to do so)            (for and on behalf  of the Agent)

Signed at means the town or suburb in which the agreement was signed and the date on which it was signed.

The seller/s all need to sign as well as the agent. If the agent is an intern, then this agreement needs to be done in the presence of a full status agent and signed by the full status agent.

The following details page needs to be comprehensively completed by and signed by the seller. This information forms part of your FICA “know your client” responsibility and also for the purpose of effecting the transfer. This page is the same as that on the OTP.

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