After deciding to sell your property and whether you need an agent, the next big question would be whether to go with an exclusive or non-exclusive agent agreement.
Do note that you have to sign CEA Prescribed Estate Agency Agreements granting agents the right to help you sell your property.
This part may be confusing, but there are different agreements to be signed depending on whether you are engaging an exclusive agent or multiple agents.
If you are engaging multiple agents, the first 4 forms without the “Exclusive” header should be utilised.
For exclusive agent contracts, pick the forms with the “Exclusive” header.
Most homeowners would immediately assume non-exclusive agreements are best, because more agents would help get their properties sold faster, and there’s no loss since they just need to pay that one agent who closes the deal.
But is that really the case?
Read on to find out what are the trade-offs and differences between hiring one exclusive agent versus multiple agents and learn what best suits your needs as a seller!
Hiring an exclusive agent
Hiring an exclusive agent means you are committed to this agent’s services for a stated period of time.
Industry-norm is usually 3 months, but you can dictate a shorter period of time within your exclusive agreement form.
This agreement dictates that even if the property is sold by other means, you are still liable to pay your exclusive agent commission.
If you’re a commitment-phobe like many of us, you’ll start questioning why then should you engage an exclusive agent.
The answer is that most exclusive agents tend to be more committed to selling your properties because there is certainty of collecting their commission once the deal is closed.
Most would pump in additional marketing efforts to help it stand out from other property listings in hope of securing a serious buyer for you.
It is not uncommon for exclusive agents to engage home-staging services or help style the property themselves prior to visitations from potential buyers.
In comparison, most agents in “non exclusive” agreements would not do that as they view it as indirectly benefiting their competitors.
Another question that often pops up when it comes to exclusive agreements is “What happens if I don’t like my agent or if I feel he/ she is not doing his job? Does it mean I’m stuck with him/ her?”
While an agreement does bind your commitment to the agent, one way to prevent a situation like that from happening is to sign a “Commitment to Service” on top of your exclusive agreement.
A “Commitment to Service” allows you as a homeowner to set a list of services you would like your agent to commit to in exchange for the exclusivity to market your property.
This can include things like frequency of advertisements and number of “open house” sessions.
Should your agent fail to provide any of these services, you can use this to terminate the clause with 1 month’s notice.
When engaging an exclusive agent, always be sure to maintain an open and clear relationship for the benefit of both parties.
We recommend only entering an exclusive agreement with an agent whom you have chemistry with, and most importantly trust that they will be up for the task.
Engaging the help of multiple agents
Most homeowners will prefer to start with non-exclusive agreements as they view it to be more flexible and to be free of obligations.
Here are some common scenarios that would arise from non-exclusive agreements:
Your property will be an open listing
Multiple agents (with your permission) can list your property and you can also sell it yourself as an owner.
Pros: This means that you would most probably see your property listing multiple times over different platforms – which would give it plenty of awareness.
Theoretically, you will reach a wider group of buyers and also access varying buyer demographics.
This is beneficial especially for people looking to rent out their property and are looking for niche groups of audiences, from budget students to wealthy foreigners.
Cons: That said, most agents would minimise their advertising efforts there after adding your property as a listing on their profile.
With increased competition, they are effectively less incentivised to prioritise your property due to uncertainty in their commission.
For example, it is not uncommon for some buyers to view the property with one agent and eventually closing the deal with another.
Even if the agent does close the deal, he is also at risk of other agents claiming they have gotten in contact with the potential buyer and eventually splitting the commission with him.
You’ll need to coordinate between multiple agents for potential customer viewings
Pros: Having multiple agents might translate to more viewings and wider perspectives from the combined expertise of these agents.
This is because having a single opinion from one agent is more skewed that having a myriad of perspectives from multiple agents, especially when they highlight to you what type of asking price should be set and the type of amenities to be highlighted.
If you are a seasoned property investor who have sold multiple properties – you might find it better to go with open listings since you no longer have a need for an exclusive agent to walk you through the nook and crannies of a sale transaction.
Cons: This also means you would need to spend more time liaising with these agents. Various viewings may clash and arise in potential conflicts between the agents.
Potential buyers may see differing details across your property listings
It is often difficult for homeowners to control the information that goes out when they engage multiple agents, resulting in interested parties seeing your listing over and over again, but with different prices and property details.
Pros: You will get more eyeballs on your property from the multiple listings.
Different agents may also advertise different “hooks” about your property, resulting in you being able to capture the attention of buyers with differing needs.
Cons: While this practice is frowned upon by CEA, some agents may end up listing your property at a lower price than agreed upon to hook buyers in, resulting in buyings being unsure about the credibility and actual pricing of your property.
This often means that you eventually get a “below market rate” offer for your property.
Comparing both exclusive and non-exclusive agreements
Here is a summary of both types of agreements:
Choose the agreement that best suit your needs
We hope you now have a better idea on the pros and cons of both agreements and are well-equipped with making the right decision for yourself.
If you are a first-time home seller, you might prefer to go with an exclusive agent to guide you through your first sale transaction due to your lack of experience in the market.
In comparison, seasoned property landlords or sellers will want to go with multiple agents to get more eyeballs on their properties and has no need for additional help on how to advertise their property.
We’ll leave with a final word of advice – always find someone you can trust and are comfortable with!
If you’re on the lookout for trusted agents in the market, feel free to check out listings from our trusted agents here.
Do check out 6 things you have to look out for when engaging your first property agent if you have any other doubts on selling your home!