Alex Goldstein on hiring multiple estate agents or just one to sell you home
In their own mind, the client envisaged an estate agency bar room brawl, with each agent clambering over each other to get their commission, whilst the saloon piano played along in the
Whilst the client’s logic was sound, it got me thinking why would they know better and what are the different types of agency instruction?
In this example, the client had instructed the agents on a multi-agency basis. This applies to two or more estate agents acting on a winner takes all basis.
As an agent, you stand to take all the fee. However if you don’t bring anything to the table, then you walk away with nothing.
It sounds great in theory but what the client didn’t realise, is that they had inadvertently shot themselves in the foot. You see, estate agents are always happy to take out their competitors, however if the risks are seen to be too high, then they won’t bother getting involved.
What happens in a multi-agency basis, is that the agents will take a property on, however it is usually so they can use it as marketing collateral.
They are not interested nor incentivised to sell your home as, at any point, the other side could pull a buyer.
Multi-agency dilutes estate agents efforts and shouts of desperation to sell. It is very rare that I suggest this route.
Spo what about joint agency? This is where two estate agents are instructed to act on your behalf and the percentage weighting of the commission towards the winning agent can be altered if required.
However this is a fine line to tread, if you don’t read the situation well enough by giving too much fee to the winning agent.
Most of the time, I would suggest that you want the agents to collaborate and act together for you the client. Therefore a 50/50 split or sometimes a 60/40 is applicable.
.Under joint agency, both agents should be contrasting, for example a large corporate and a smaller local firm, and this can be a subtle way to change the energy of your sale.
Whilst there is usually a higher fee to pay for two agents, it is useful to have in your armoury depending on the property you are selling.
Your final option is sole agency. One agent acting for you and, if rewarded correctly, they will kick down the doors of every saloon bar in town to secure that buyer.
Instructing one estate agent is great. Two can be a power team but putting agents on a winner takes all basis will lead to a Mexican standoff.
Alex Goldstein is an independent property consultant, www.alexgoldstein.co.uk