As I understand it there are basically four types of estate agency agreement – a sole agency, sole selling rights, joint sole agency and a multiple (sometimes called a general) agency. I’m sure there are a few more variants, but essentially those are the main options to be considered by a prospective seller and agent.
Like most agents, over the years I have experienced all of these options with various degrees of success for both myself and my clients. That said, I can honestly say that the most successful for both parties have been the sole agency/sole selling rights options. I do not have the actual data to back this up and I could be wrong but I would hazard a guess that well over 90% of properties for sale across the UK are currently being offered under a standard sole agency/sole selling rights arrangement – this is certainly the case in the area I operate in.
Now don’t get me wrong, I really am a believer when it comes to a sole agency. It provides a sense of exclusivity with the marketing, avoiding the appearance of desperation to sell that a multiple agency listing can sometimes convey. However, I do have a question as to the length of time for a sole agency which, for the purposes of this article, will include a sole selling rights agreement.
A sole agency means that an agent really can act in the interests of the seller when it comes to advising on the acceptance of an offer without the concern that a competitor agent in a multiple agency situation will “steal the sale” with a less credible buyer. It encourages a mutual commitment from both the estate agent and the seller and the agent has the confidence to invest time and money in promoting the property with the certainty that if a buyer proceeds to completion, they will receive a fee.
Of course, according to the statistics provided by fellow EYE contributor, Chris Watkin, and the wonderful people at TwentyEA even then, there’s only a 50% chance that the property transaction will actually complete! And perhaps that is part of what I see as a problem…
With the “luxury” of an 8, 10 or 12 week sole agency (I’ve heard of even longer sole agency periods) where is the incentive to honestly advise the prospective seller as to an attractive asking price which will generate viewers as soon as possible? Call me cynical, but all too often I see fellow estate agents going along with a vendors often inflated idea as to value or even suggesting a figure themselves that is far higher than they really believe should be the case. The agent claims to be “testing the market” which has a sense of credibility and to an extent is actually true. The problem is, deep down, the agent already knows what the results of that “test” will be and spends the subsequent 2,3 or 6 months advising the seller to reduce the asking price. This inevitably results in a house price reduction spiral, a lack of credibility for the property and all too often no sale at all. What a waste of resources!
So why does this happen and what is a potential answer to the problem?
Well, I believe that the main explanation for this phenomenon is the chase for market share and the much mooted phrase “if we haven’t got it on our books, we can’t sell it”.
Before anyone claims that a particular type of agent employs this tactic, I would suggest this approach is not the sole preserve of “the corporates” but in my view a dubious philosophy employed by many, even most, estate agents whatever their business model. Both of these
justifications are supported by a certain logic which is why they are so prevalent. However, I would contend they are ideas that are damaging to both estate agents and our customers – both buyers and sellers.
A recent experience provided me with even further insight into the problem and a glimpse of how it might be solved…
A few weeks ago, I produced and promoted through social media, a 90 second video entitled “5 DON’TS WHEN CHOOSING YOUR ESTATE AGENT”.
Here it is, in case you are interested:
Read the orginal article: https://propertyindustryeye.com/im-a-sole-man-but-only-for-two-weeks/
