One agency on the job, or more?
We are often asked the question - should I list with a sole agency or a general agency?
Real estate companies like sellers to list with them as a sole agency because it makes the whole process of administering and managing a property sale from the outset to the end, more seamless. It also minimises complications that can occur when multiple people or agencies are involved. This can cause added stress for home sellers which can be avoided.
If an agency is second in line, they might encourage a general listing if you're indicating a preference for another company.
So it can be confusing and hard to decide without giving it some solid thought.
Experience tells us that signing a sole agency is by far the best option but it's time to debate the pros and cons and also consider the perceptions around each of them.
Then further down, we take a look at a buyer's perspective, rather than the seller's, to see what difference this would make to a decision.
This is a decision that should not be taken lightly. The fate of your sale, good or otherwise, relies on the right decision for you and your property.
General agency: Pros
General agency means that you can list your property for sale with multiple agencies (you can change your mind within one working day of receipt of a signed copy).
- The more agents you list with, the more widely your property will get seen.
- You have more people 'out there' actively promoting your property.
- It will be seen in all the windows of each agency that listed it - great.
- The competition between the agents will make them more hungry to sell it first so they get the commission.
Sole Agency: Pros
Sole agency means you can legally list with only one agent until the term of your agreement has expired (but you can change your mind within one working day of receipt of a signed copy.)
- You get 100 per cent effort from one proactive agent.
- There is less paperwork for sellers to read and sign.
- You are dealing with only one agent and their assistants if they have any.
- You get one sign only in front of the property.
- You have one coordinated standard of marketing, photos and advertising (so long as you choose the right agent in the first place).
- Open homes and viewings are done by one person/agency making it more organised.
- Less people to be discussing all manner of things about your property with.
- Keeping your eye on the ball is much easier with one agency than multiple.
General agency: Cons
- Each agency will market your property even though only one of the agents will be contacted by buyers. The one that sells it generally gets the commission.
- Commission can be contested and argued about between agents.
- You may be liable for paying double commission to two agencies without signing the clause that protects you otherwise.
- You can end up with multiple sign boards outside your property which can cheapen your campaign.
- Trade Me ads cost good money so you will likely only want to pay for one of these. Which agency will you choose?
- You can be dealing with multiple people, documents, reports from agents. It can get very busy administratively.
- Viewings can be somewhat disorganised time wise and for tenanted properties this can cause unwelcome disruption to tenants.
- One buyer could come to the open home, then later go online and contact the agent who advertises it online. Agents not happy....
- Advertising standards differ between companies that listed the property.
- In some markets and locations, auctions or tenders may be the best way to generate the best sale price. So with a general agency, you may be closing the door on methods of sale that will optimise your sale price.
- General agency listings will likely just have your property on their own company websites, each will advertise on realestate.co.nz and only one on Trade Me.
- Agent negotiation skills can vary - what if a buyer contacts an agent that is the least skilled negotiator?
Time for a re-think. What are you trying to achieve?
Sole agency cons
- Your property might be seen by less buyers.
- You can't change your mind and list as a general agency until your sole agency date has expired (although there is an exception if you change your mind within one working day from signing).
- If the one agent is too busy or a little lazy, you have no fall back.
Take a look at the way buyers search for properties
The online way
- Firstly, people search primarily on either Trade Me or realestate.co.nz. On either website, they search on price, area and type of property to start with.
- On Trade Me for example, your property is likely to show only with one agency due to the cost, so if Trade Me is the portal buyers primarily use, they may only contact the agency that advertises your property.
- On realestate.co.nz, most real estate companies provide this at no cost so you would likely see your property listed multiple times, each with a different photo unless you tell them otherwise.
- The other most common place people look is the Property Press. Again, you're not likely to fund each agency to pay for advertising your property here due to the costs. Whichever agency does this, they will likely get the call from a buyer.
In our view, general agencies can get messy and cancel out your good intentions in choosing that option.
We think that general agencies are less effective in the long run and are perhaps a thing of the past due to the digital world we live in. But hey, your choice!
It is recommended that this information should be read in conjunction with the advice provided by the Real Estate Authority on Agency Agreements.