“The other agents will try harder!” ….. “the more coverage you’ve got the better’” ….. “the more agents you have the greater your chances of selling!”
Your home isn’t selling and you’re not sure what to do. These are some of the usual replies you may hear if you ask around. They sound plausible enough, but are they right?
Some agents and members of the public believe that multi-agency does increase your chances of selling but many, me included, do not. Before I explain why, I should also explain that I DO believe that joint or sub-agency agreements can work but there are different to a normal multi-agency agreement.
At this point, it may be helpful to the differences between sole-agency (SA) and multi-agency (MA) agreements? Below, are set out the definitions of each type of agreement taken from our estate agency contract (holder of the Plain English honesty and Clarity mark) that we send to each of our selling customers at my company, PDQ.
Multiple-agency – when you have more than one agent working for you. You will pay whichever agent introduces the buyer.
Sole-agency – the agent you appoint is usually the only agent who has a right to sell the property. You may appoint other agents, but you will usually have to pay extra costs and fees. As the owner is not an agent, the owner has the right to sell privately and will not be charged a selling fee (unless the buyer was introduced by the agent).
‘The other agents will try harder!’ To an extent, that statement is partly true but, it’s not as simple as that.In a SA, the agent has the clearest incentive to work for his client to achieve the best price in the current market. He knows that, as long as he does his job well, has good, well-trained staff and has priced the property correctly to attract good interest, his efforts will be rewarded by a paid invoice on completion of contracts.
In a MA contract though, this is not the case. In a MA the agents do not have the certainty that if they do a good job and work hard to obtain the best price, that they will secure the sale. In MA, it is dog eat dog, where the first agent to secure an offer, any offer, will be desperate to encourage the seller to take the offer through their agency rather than, possibly, wait for a higher offer to be made by a better buyer.
Why should this be? Surely, you might say, an agent has a duty to obtain the best for their client? And you would be right BUT, put yourself in the shoes of a typical negotiator in a typical estate agents office. He/ she is there to earn a living, just like you. If your property sells through his efforts, he will get paid, if it doesn’t he may not or, at the very least, he may lose between a third and a half of the wages he might make if he had been successful. He knows that if his offer isn’t accepted, another agent may secure a similar or higher offer which MIGHT be accepted and he (the agent) will lose out. So now, with that thought held firmly in your head; ask yourself, if you were that agent, would you recommend the first offer your office secured on a customer’s home or, would you gallantly suggest they might achieve a little more if they waited, after all, he knows from speaking to the owner that there is another viewing from another agent coming around this afternoon….
Whilst the above argument against MA is my chief one, most agents will also tell you that MA’s can cause horrendous commission disputes between agents that owners and buyers inevitably become embroiled in which can cost sales and certainly add stress at an already very stressful time. Agents employed on a MA basis work AGAINST each other rather than FOR you. Driving service down, prices down and, quite often, putting off buyers by encouraging very pushy sales tactics to ensure that their office secures the sale (see above)
‘The more coverage you’ve got the better’ Again, this statement has some truth in it but, let’s look at what that actually means in the real world. In a typical town or area of a City, each agent will have access to pretty much the same advertising mediums as the other. Most will advertise on a major portal, most will have their own websites, most will advertise in the local or regional paper and a few may even use social media to help market your home. But, unless one agent has a particularly unique feature, then any buyer looking for a property is going to see your home is for sale no matter WHICH agent is marketing it. Putting it with more than one agent is simply going to have it seen several times by the same buyers which may be interpreted as a little desperate by some, who will almost certainly negotiate that bit harder on price as a result. Which leads me on to…
‘The more agents you have the greater your chances of selling’ As in the last paragraph, the chances are that the more agents you put your home with, all you are really doing is increasing the number of times a buyer will see the same home rather than increase the total number of buyers seeing your home. In fact, if your home is seen everywhere, you can experience what I call the ‘oh no, not that one again!’ effect; where buyers utter that phrase when the latest in a long line of agents in the town tries to suggest a viewing on your home; which is not, I suspect, the real result the owner is after.
It could be argued that MA does have a role to play IF you need to sell quickly and IF best price is not a factor but then, if price is not a factor and a quick sale is required, any half-decent agent worth his salt will be able to find a buyer for you on a sole agency basis and, will charge you less for the privilege; after all, multi-agency tends to cost around a third more.
I welcome feedback so please feel free to leave constructive criticisms or ask questions below. If you could also take a second to rate my blog and pass it on to others who you think may find it interesting that would be great. Thanks.
About Chris Wood: Chris is an estate agent with over 25 years of property experience. His business, PDQ Estates Ltd is based in Penzance and Helston, West Cornwall. He has worked with all sizes and types of businesses from single office independents to the management team and board of RBS and Tesco. A former President Elect of the NAEA and board member of NFoPP until he resigned in 2009, Chris has always championed the highest professional standards forestate agents in the UK. No stranger to the media, he has appeared on various programs including BBC, News 24, ITV, independent and BBC radio and is a regular contributor to trade journals, local and national Newspapers. Chris is on KloutLinkedIn Ecademy Facebook and Twitter and lives in Penzance. In his spare time; Chris likes to keep fit and was a long-standing member of the Territorial Army. In 2010 he mobilised for a tour of duty in Afghanistan with 1 Rifles as part of 3 Commando Brigade.