Which is better? To engage an Exclusive agent or Multiple agents?
Many sellers and buyers still prefer to engage the services of a property agent although they can DIY, buy or sell property on their own. This is because many are unfamiliar with the procedures in a property transaction and it can sometimes be complicated and it is also very time consuming.
The most important thing before appointing your property agent is to check with CEA, Council for Estates Agencies to see if the agent is registered with the council. It is illegal for anyone to carry out real estate work without a valid licence.
The other important factors to confirm before you appoint the agent include
1. Commission – You can first discuss the scope of work with your agent and agree on a fair commission rate that commensurate with the amount of work needed. You have to spell out how much commission will you be giving to the agent. This can be done via whatsapp or other forms of writing.
2. Exclusive or non exclusive – You have to decide if you want an exclusive or non-exclusive arrangement. It would be best to inform your agent of the arrangement.
3. Responsibilities of your agents – It is important that you understand the responsibilities of your agents when you engage them.
4. Conflict of interest situations – There can be possible areas for conflict of interest such as selling the property to agent’s family members, or the agent may be getting some fees from other parties for pushing the unit to them.
5. Important documents – Instead of verbal agreement, put everything that is discuss and agreed upon with your agent in writing. This can be documented in the esate agency agreement CEA form. Another form, called Customer’s Particulars Form is also compulsory, it is a government measures to prevent money laundering and to counter terrorism financing in Singapore.
Using Multiple Agents
Many sellers think that having multiple agents is better, they thought it means higher chance to promote the property and the property will be sold faster.
But it does have many disadvantages.
1.Worse if you have to open the door each time and makes you extremely busy with the schedule, because in case of multiple agents they do not screen the prospect, and will bring anyone to view unit regardless of how potential is the client. Also chances are very high that some of the booking schedules are duplicated by the same prospect arranging with different agents, making you waste trips to open doors.
2. When unit is sold by multiple agents, there will be a scenario where every agent will try to use a different photo and may vary the price to attract customer. This sends out the wrong message to the buyer. Besides confusing the buyer, it will create a impression that the seller is desperate and may likely accept a lower price. It may likely lower the selling price of your property, as buyers will always refer to the lowest price advertised. It is like a scream of desperation, and this isn’t the message that sellers want to convey.
3. Having many agents posting the same unit for sale, may scare off buyers. Buyers will be asking why are there so many agents trying to sell the same house, is there some underlying issues that they are not aware of.”
4. With multiple agents, the agent will bring to seller the first offer they receive, which might not be the best offer, and this is because they want to get the offer to the seller fast before another agent does.
5. Many sellers are not aware of the binding nature of accepting an offer to purchase. This can open the seller up to legal action in the case where multiple agents are marketing one property should the seller accept two offers from two different agents.
6. Opening up your house for viewing do carry risk. The seller has to ensure that all valuables are secure and kept away. By having multiple agents the risk is higher because not all agents will accompany the buyers to walk around the house, and some agents might not even turn up and ask buyers to view on their own.
Seller must remember that all buyers are not loyal to their agents, and all agents are actually tapping into the same pool of buyers, and using the same marketing portal like PROPERTYGURU or 99.co to source for buyers. This means having multiple agents do not mean you will get more potential buyers.
In any sale, you want the buyers to compete to buy unit not the agents competing to get buyers. The agents are not the person who will buy unit, it is the buyers.
What sellers don’t realise is that most agents will spend more effort and focus their time on sole exclusives and less time and focus on open jobs with multiple agents.
This is because agents don’t want to spend too much time, money and effort in selling, only to lose the deal to another agent. Agents only earn on commission so they will focus their resources on the most likely outcome, i.e. exclusive deals.
Most agents in “non exclusive” agreements will not do extras, as they view it as indirectly benefiting their competitors who is selling the same property.
Use 1 agent on exclusive arrangement
Selecting an exclusive agreement with one agent will give you the optimum chance of selling your home for the best price in the shortest time without the need to deal with so many different agents, and having so many risks.
When the agent is a sole representative, he is likely to be in a stronger position to negotiate with other agents (co-broke) or parties in the transaction.
Usually an exclusive rights agreement is valid for 3 months, after which the seller is free to approach another agent to market the property.
So if you prefer to use someone who is more motivated, and devoted to spend time and resource on your property, then giving exclusive right to an agent is the way to go.
In Singapore, the Council of Estate Agencies (CEA) provides a form, to allow a seller to engage an agent on an exclusive basis. This form Exclusive Estate Agency Agreement authorise only the agent or agency in question to introduce buyers or tenants for your property over a certain period.
And during the validity period, you are required to pay the exclusive agent a commission if you enter into any agreement for the sale of your property. The Agreement also states you are not to engage any other property agents while the contract is still in effect.
If no suitable buyer is found by the end of contract, the seller may choose to renew the Exclusive Estate Agency Agreement.
Advantages of Exclusive Agent
Having an exclusive agent means that you only need to deal with one person instead of multiple agents. And having one person gives you these advantages
- Dedication – The exclusive agent is more dedicated to promote your property because they know they are the only one who can earn the commission from the sale of your property. No need to fear commission may be hijack by other agents.
- Better marketing – A dedicated agent will likely put in better pictures, stage the property in the best position to be sold with more quality furniture or props. Will use more sophisticated marketing tools like videos, which could attract more and higher quality buyers. In some exclusive Agreement, the seller may specify frequency of advertisements and type of ads as a term of contract.
- Easier coordination – Less troublesome and less time consuming than having to deal with multiple agents
- No duplicate listing of your property on the same marketing portal.– All agents use the same marketing portal eg. PropertyGuru, 99.co , so the reach to buyer is the same if you use one agent instead of many agents
- Better control over the price – Seller can monitor the selling price of one agent easier than to watch out over multiple agents. When you hire too many agents, it is more difficult to control asking price, and seller will run a greater danger with many agents pressuring you to lower your asking price with many lower price offers.
Most exclusive agents tend to be more committed to selling your property because there is a written certainty of collecting their commission once the deal is closed. And they would pump in additional marketing efforts to make the property stand out from other listings so that you can secure a serious buyer.
Disadvantage of having one exclusive agent
1. You are locked in with one agent for better or for worse
2. You need to pay the agent’s commission even if you sell the property through any other means
3. When you sign an Exclusive Estate Agency Agreement, you’ll also have to pay your appointed agent commission if you sell your property to someone referred by the said agent within three months AFTER the validity period expires.
CONCLUSIONS :
After listing out the pro and cons of both exclusive and multiple agents, we think you have a better idea which is better for you.
Generally, if you are a new to selling, you might want to consider exclusive agent who will guide you through the sale process due to your lack of experience.
But if you are a seasoned property seller, you may still prefer to use multiple agents to get more exposure to your property. As you do not need expertise advice from the agent on how to advertise your property.
Will you consider giving your agent exclusive rights to market the property?
Based on above points, it may point to a confirmation to use exclusive agent, but we still need to consider the most important point. That is to find someone who is a good agent and it is someone that you trust.
At the end, this agent must be willing to put time and effort to market your property. Nowadays, most realtor company has establish internal links to help agents.
Although you sign an exclusive deal with an agent, there will be a system that enable a team to support the agent in his marketing efforts and even connect prospective buyer to your property.
Eg. In OrangeTee, we have fellow team mates to help you, plus an application call LINK UP to allow fellow OT colleagues to jointly market the property. In this way, the effects of Exclusive agency agreement is greatly amplified.
In the event that you do not have a good agent to work with on exclusive basis and want to use multiple agents. You should be prudent and selective in the number of agents allowed to market your property and from there find one which is most trustworthy, to use as an exclusive agent.
If you are still unsure about what to do, you may want to contact me, RICK, for a casual disussion and I could assist you in the process.
Schedule time with meArticle by Rick Fok
Rick Fok is a realtor with OrangeTee & Tie Pte Ltd. He has been in this real estate business for 9 years. He is very focus in helping his clients rent properties and he does help many customers to buy new projects according to their needs. His interest include sports such as running and soccer besides just real estate work. He loves to connect with people to discuss properties related issues and gets enormous satisfaction in helping them fulfill their needs. If you have any queries on this topic or other , please do give Rick a call and we can discuss this over a cup of coffee.
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