Should you engage an exclusive agent to market your property?
After deciding to sell your property, the next step is to decide if engaging an exclusive agent is a better choice or engaging multiple agents to market your property.
Some property owners seem to think that since there are no limits to the number of agents a
seller can engage, they should engage many agents to sell their property. After all, there is the saying, " The more the merrier!"
Multiple agents marketing means more outreach, more exposure which leads to more viewings.
Thus, the property will be sold at a faster rate and at a higher price! Is that really the case?
When I was marketing a landed property a while ago, the owner actually engaged almost 70 property agents to market his house.
Contrary to what he thought, the house remained unsold for a long time!
What does it mean to engage an exclusive agent then? Having an exclusive agent means you will deal only with one agency, and in most cases, one agent from that agency, instead of multiple ones.
Here's what the Council for Estate Agencies defines an exclusive agreement and non exclusive agreement.
For exclusive agreements:
Seller appoints one property agent from a particular agency to sell the property for the validity period of up to 3 months. This validity period can be extended.
During the validity period, seller is required to pay commission to the appointed property agent's agency even if he/she manages to sell the property on his/her own through own contacts or complete the transaction through another agency.
Within three months after the validity period, seller is still expected to pay commission to the appointed agency if the property is transacted with a buyer introduced by the appointed agency during the validity period
For non-exclusive agreements:
Seller appoints a few property agents to sell the property.
There can be multiple agents who are independent of each other but are from the same agenciy marketing the property. There can also be agents from different agencies as well.
Seller will pay commission to the property agency of the agent who successfully helps him/her to close the deal.
Let's look at the pros and cons of an exclusive agent in detail.
PROS of engaging an Exclusive Agent
No multiple duplicate listings
These days, most agents actually use the same platforms online to market their listings. These platforms include propertyguru, 99.co and edgeprop etc. Some also use the classified advertisement section in the newspaper to advertise their listings.
Hence, by using multiple agents, the probabilities are higher that there'll be many listings for your property on an equivalent site. Just imagine, you are searching for a property on propertyguru and you saw an interesting one that caught your eye.
Then, you saw many more agents marketing the same property.......
In reality, seeing many duplicate listings of a property by multiple agents may be a big turn-off for buyers, who might think that the seller is simply wanting to sell an inferior property or the property is one with underlying issues and that is why there are so many agents engaged to market the property. Some genuine buyers may even think that this is a scam!
Having to speak and coordinate with multiple agents are often troublesome and time-consuming, which may defeat the purpose of having an agent in the first place which is to save yourself time and hassle.
Using only one agent is far more straightforward and saves you time at the end of the day.
Dedication of the agent
Agents promoting your property under an exclusive agreement know that they're the sole ones handling your case, and don’t need to worry about another agent eventually finding a buyer for your property and pocketing the commission.
As a result, they're likely to place more effort and time into promoting your property.
Better control over marketing strategies
Have you ever wondered why some property listings look a lot better than others?
A motivated agent with exclusive rights to market your property will put up a more attractive listing with better pictures, 'stage' the property with nice furniture and may use more sophisticated marketing tools like videos, which could attract more and better quality buyers.
An exclusive Agreement can also specify the extent of services offered, like frequency of advertisements and 'open house' sessions.
There is no point having five agents who can sell your property, if all of them put you last on the priority list (because they think somebody else might get the commission).
A non-exclusive agent might even use your house as leverage to sell another property on his/her list. After all, there is no guarantee he/she will get the commission as there are so many agents marketing it!
The agent might show a prospective buyer your house first, because he/she has access , after which they'll bring the customer to a far better house, using the technique of contrast to drive up the perceived value of the second home.
In short, you could possibly get played if you employ multiple agents!
Better control over the price
Once you hire too many agents, it's harder to control your selling price , and you run a greater danger of agents pressuring you to lower your selling price so as to draw in more buyers, in order that they are the ones to conclude the deal.
If you work with an exclusive agent, it's much easier to set your price expectations clearly. Since the agent isn't afraid to lose the deal to a different agent, he/she has more incentive to make sure you get the best price possible.
CONS of engaging an Exclusive Agent
On the other hand, engaging an exclusive agent does have some disadvantages.
Possibility of being stuck with an incompetent agent for at least 3 months
In theory, engaging an exclusive agent often comes with better services and marketing strategies. In reality, the agent plays a huge part.
If you're unlucky enough to engage an agent who has many other cases to prioritise over yours, is just not a talented marketer or, worse, doesn't even bother to make an inventory for your property, you'll be forced to stay with him/her for the whole duration of the agreement.
Need to pay the agent’s commission even if you sell the property through other means
This is one of the major disadvantage of having an exclusive agent. Even if you manage to seek out a buyer on your own, whether through a private connection or another means, you're still obliged to pay the agent’s commission.
Also note that if you sign an Exclusive Estate Agency Agreement, you'll even have to pay your appointed agent commission if you sell your property to someone referred by this particular agent within three months AFTER the validity period expires.
Cost of engaging an exclusive agent
Usually the commission paid to an exclusive agent is 2 percent or more. This may seem higher than open listings commissions.
However, exclusive agents will definitely spend a lot more resources ( money, time and effort) to market your property as they do not have to worry about competition from another agent.
They will be more dedicated, motivated and driven to try conclude the sale.
So, what is the best solution?
The most important thing as a seller is to look for a honest agent you can trust and who is willing to put the time and energy into marketing your property well. Then appoint him/her as your exclusive agent.
A good tip would be to ask for recommendations from your friends and relatives.
Once you have found the suitable agent, stick with him/her if you do not not want prospective buyers to start out asking questions like “How come there are numerous agents and it’s still not sold? ”
In conclusion, after evaluating the pros and cons, you might be better off offering one property agent and his/her agency the exclusive rights to sell your property.
Given how properties are marketed nowadays, the multiple agents route doesn't offer much benefit.
After all, as a seller, your main aim is to sell your property in the shortest time at the highest price possible!
Yes, the commission paid out to the exclusive agent might cost a little more but if that agent is able to market your property professionally and effectively with his/her team to secure a good price for your property, that will save you a lot of hassle later on!
In the event that your exclusive agent is really not performing up to your standard, after the 3 months period, you can always replace him/her.
Another point to note is that these days, although you will be working with one exclusive agent, many agents nowadays work as a team therefore they are able to pool their resources together to market the property and support each other by sharing the costs.
By doing so, they are able to provide the seller with marketing strategies like video marketing which is rather costly but gaining popularity especially with more IT savvy buyers and also conducting open house which requires manpower.
Overall, they are able to provide a much more attractive marketing campaign for your property.
The seller in turn will have the best of both worlds, an exclusive agent but the efforts of the whole team!
For those sellers that just cannot seem to find an agent that they are comfortable with, they can start by engaging a few agents to market their properties. Once they have identified an agent that they can trust, they can then proceed to appoint that agent as their exclusive agent!
If you would like to find out more, please feel free to contact me for a non obligatory 90 min free consultation at 96658596
Having a keen interest and passion in real estate led Caroline to join the real estate industry. An investor herself since 2006, Caroline is constantly learning and upgrading herself through courses and seminars so that she is able to provide meaningful insights to her clients and to help them successfully manage and restructure their portfolios in the ever- changing market conditions.
Caroline strives to be honest, transparent and professional in all her real estate dealings with her clients. She understands that clients need to work with someone they trust, as they will be entrusting their valuable assets to that person. She is known to be trustworthy and reliable and will ensure that her clients’ interests are protected always.
With a strong commitment to client satisfaction and with the support of her teammates from Navis Living Group (Orange Tee and Tie) , she is confident that she will be able to share her experiences and knowledge to assist her clients in making the best decisions for their real estate needs so that they can achieve their desired real estate goals.