When your property goes to market, you want to get the best result possible in a reasonable timeframe. For some, this means enlisting the help of more than one real estate agent to increase their chances of finding a buyer. This might seem like a good idea in theory, however, many home sellers choose to sign an exclusive agency agreement to simplify the process and take a more focused approach.
An exclusive agency agreement occurs between a seller and their chosen real estate agent or agency. It excludes all other agents from representing your property and means you have one central point of contact for the sale of your property. The opposite approach involves an open agency agreement, which leaves you free to list your home with multiple real estate agents, but means none are likely to give the sale of your home their full commitment.
An exclusive agreement means that the responsibility to sell your home rests exclusively with your agent, often within a specified period of time. This gives you a degree of certainty, and a more simplified experience. By only having to track what one agent is doing, you can monitor the process in a more engaged way, expect your agent’s 100% commitment, and even offer commission incentives to boost their efforts. For example, you could offer a bonus if the property sells within 4 weeks, or maybe agree on a sliding scale commission, based on the final sale price, so if you get more money than expected, your agent does too.
Exclusive listings have their pros and cons of course but the overriding benefit is that exclusivity. It means you will have the agent’s total commitment to your property and the return they receive is entirely dependent on the result they achieve. The downside of course is if you get bad agent, you’re limited in how much control you have over improving the situation if things aren’t going well. In the case of open listings, you can monitor which agent is producing the best results (and they love a bit of healthy competition) and focus on their efforts, whilst still keeping a couple of irons in the fire elsewhere so to speak. However, even if one agent works very hard on your open listing, they run the risk that another agent will get lucky and sell your home off just one inspection – leaving them with absolutely no fee for the sale of your home. Like all businesspeople, real estate agents are more inclined to focus their efforts where they will get a result.
Still confused? Remember an agent’s income is earnt from sales, not listings, so if they feel the investment of their time in selling your openly listed property is too risky, they may well ignore it. If an agent has the exclusive responsibility to sell your property and knows all the reward will come their way when they achieve a result you are happy with, they are much more likely to roll their sleeves up and do the hard yards so you can all celebrate with Champagne when the contract of sale is signed!
For advice or more information about the pros and cons of exclusive listings, contact your friendly local First National Real Estate agent .