Chan Ai Cheng discusses a perennial problem faced by sellers – to give exclusivity or not to an agent?
Sellers of property constantly ponder upon this question, whether or not to appoint just one agent to market the property or just open up to as many agents as possible to work on marketing the property.
Before we go into the actual thoughts in the decision-making process, it is important to understand the definition of an Ad-Hoc Listing and an Exclusive Listing.
An exclusive agency listing is where you give the full right of the sale of the property to an appointed exclusive estate agent. In this case, only the appointed exclusive agent is authorized to market the sale of the property and to transact the sale for their fees. The top benefit of an exclusive listing is that the agent gives your listing a higher priority. This is important as you would want the agent to work on the listing and not just sit on it.
When selecting an exclusive agent, be sure to consider his or her experience in real estate, track record in handling similar properties, commitment to the marketing & sale of the property, network of potential buyers, and is someone you are comfortable and confident with.
The downside to exclusive listing is in your selection of the exclusive agent. You are tied down with the agent for the period of the exclusive appointment and if he or she is ineffective, there isn’t much that you could do about it.
An ad-hoc listing or in other terms, open listing lets you sell the property by yourself and to appoint as many agents as you please to work on the marketing of the property. It is also termed non-exclusive listing, meaning the owner may execute ad-hoc listing with more than one real estate agent and pay only the real estate agent who brings an able buyer whose offer the owner accepts.
Considerations when appointing agents on Ad-Hoc basis
When a listing is given to many agents, quite naturally the agents will begin marketing the property which would include advertising i.e. on iproperty.com.my property portal.
Now a typical buyer looking for a property will run through the search engine and all listings that match their requirements will appear. Imagine the results show 6 or more advertisements for the same property. The first impression the potential buyer gets is that the owner could be in a hurry to sell. This will not work well for the owner as this may not be the case even on an ad-hoc listing situation.
Then comes the next problem, which agent to call if they are really interested in the property? Should they call the agent who advertises the lowest price? There are instances of the agents putting different prices for the same property, at times just slightly lower than the other to hopefully get the call from prospective buyer. Buyers will unlikely call the agent advertising the same property where the asking price is higher for the very fact that buyers want to buy at the best possible price.
There could also be situations where the buyer calls a few of the agents marketing the same property and there are also instances where they make different offers for the property hoping to finally get it at the price that they want. This will create artificial interest on the property all by one buyer and confuse you as the owner.
These points are worth considering when making the decision to appoint an exclusive agent or multiple agents to market your property.
Why Real Estate Agents prefer Exclusive Listing?
The number one reason is the certainty of payment. It is nothing more comforting to an agent than to have the certainty of their efforts compensated. There are costs involved in marketing a property for sale in addition to the time spent on working at securing offers for the property.
When there is a single agent involved in marketing the property, there is concentrated effort in the marketing as there is more commitment from the agent. The agent, knowing that the sale or rental of the property is dependent only on him or her, will ensure that he/she is responsible and accountable.
I can share from experience of working with sellers of property on an exclusive basis. It is a lot more stressful for the agent as he or she must deliver with results, knowing that the owner has entrusted the duty solely on him or her, especially so when there is an urgent sale or rental situation. The agent will reciprocate the trust the seller or landlord has on them with a heightened duty of care.
The number two reason is control on the sale of the property in order to work out the best offer.
Naturally, because of this, you cannot expect the same level of commitment and service when you appoint the agent on an ad-hoc basis versus on an exclusive basis.
Making the Choice
Making an educated decision is usually the key to making the right decision. If you have fully understood the benefits of an exclusive listing vs an ad hoc listing, you can make the right choice for your property. Be sure to consider all the facts carefully. You do not want to short yourself in a sale.
Also, be aware of the length of time that you are agreeing to for an exclusive listing. Be sure to ask your real estate agent to work with other agents on the sale of the property as part of the understanding of appointing him or her as your exclusive agent to benefit from a larger pool of buyers. A good real estate agent should be flexible and should aim to meet the needs of the owners while providing great advice and great service.
There is also an option of a sole listing, where, as the owner, you can reserve the right to sell the property yourself and not pay any fees and still maintain the services of one agent working on the marketing of the property. Be sure to check with your real estate agents on the implications of these various listing options to ensure that you are fully aware of your options.
Chan Ai Cheng is the General Manager of S. K. Brothers Realty (M) Sdn Bhd, a firm established since 1979 in the practice of Real Estate in Malaysia. She is a Registered Estate Agent with the Board of Valuers, Appraisers and Estate Agents Malaysia (LPPEH) and a Member of ISM and MIEA.
She was recently conferred the prestigious title of Certified Residential Specialist by NAR, USA and also recognized for her contributions by the Malaysian Women’s Weekly 2007 being the Winner of the Great Women of Our Time Award in the Finance & Commerce Category. She is a regular feature in the press on property matters.