How Does an Exclusive Estate Agency Agreement Work?
Engaging an exclusive agent means that the seller agrees to authorise one real estate agent to market the property over a stated period of time, usually 3 months by default.
During this period, the seller is not allowed to engage any other real estate agents to market this property.
If necessary, the appointed real estate agent would co-broke with a buyer’s agent for the sale of this property.
Pros & Cons
As a property seller, it may be natural to think that having multiple agents will speed up the sale of your home or get you a better deal.
However, it is essential to consider whether this approach truly is the best for you. Will your interests be best represented by multiple non-exclusive agents?
So what are the pros and cons of engaging an exclusive agent?
Pros of Engaging An Exclusive Agent
Communication: Coordinating with several agents can be cumbersome. There could also be a lag time in communication leading to a compromise in your closing price.
Dedicated & Effective Marketing: An exclusive agent will invest maximum time, energy, and spend top dollar in marketing the property while non-exclusive agents may have reservations on spending more because there is no guarantee that the property would be sold by him/her.
Prevent Perception of Desperation: Duplicate property listings on PropertyGuru may lead to buyers thinking that you are desperate to sell. They may attempt to find one competing agent who is willing to push for the lowest price for them.
Better Analysis: Non-exclusive agents may not be as quick to cater to your specific needs or provide you with the in-depth data analysis that is required, considering they may not be as invested in your case.
Cons of Engaging An Exclusive Agent
Exclusive Agent Commitment: When you choose an exclusive agent, you commit to that agent’s services for a defined term. However, if your agent is incompetent, you are still bound to him/her for that period.
Commission Obligation: Even if you find a buyer on your own during the specified period of the exclusive contract, you would still need to pay the exclusive agent the agreed commission.
In a Nutshell,
This is a classic case of quality vs quantity, where more is not necessarily better.
Whether to give exclusive rights to an agent hinges on what you are looking for.
Are You Looking For an Agent Who:
- is highly committed and ready to invest substantial time and resources (advertising budget) to get you the best price
- is resourceful and thinks out of the box to come up with ways to convert viewings into potential offers
- always keeps your interests at his/her top priority during the entire sale process and goes beyond the regular duty to ensure everything goes smoothly
- consistently provides feedback and a clear action plan on what needs to be done
- is looking to build a long-term working relationship with you (not out here to make a quick buck)
Or Settling For Agents Who:
- only want to close the deal as fast as possible to beat the other agents to earn your commission
- think that their job is mainly turning up for viewings and handling paperwork i.e. do not value-add
- are transactional and see your home as just one out of the many houses they have to sell (to put it bluntly, like how you see them as just one out of many agents who can get your house sold)
- do not put in their 100% in terms of time, effort and marketing budget because they know that there are other agents marketing anyway
