When you are trying to sell a house, is it best to use more than one estate agent, or choose one and stick with them? It’s a frequently asked question, and it may be tempting to think that two (or more) heads are better than one. However, it’s not necessarily as simple as that. This article will cover the factors you should consider when choosing between sole, joint or multiple agents.
Sole agents means just that: a single estate agency has the sole right to sell your property. When signing up with a sole agent you will usually enter into an exclusivity agreement, typically lasting 12 weeks or more. If you sell your property within this time – even if the agent didn’t find the buyer – then you have to pay the agent commission.
Alternatively, you can instruct multiple agents: in this case the various firms (three or more) will be competing with each other to sell your property, and only the successful agent will get the commission.
A halfway house between these two methods is appointing joint sole agents. This means choosing two (or perhaps three) firms who work on a more co-operative basis. Often the firms will agree to share the commission payments between them, with a greater share going to the firm that secures the sale. A typical case when joint sole agents might be appropriate would be selling a prime country property, when the vendor may choose to appoint a local agent as well as a high-end national agency that markets to wealthy buyers in London or overseas.
The first advantage of sticking with a sole agent is cost. Because the agent is not competing to sell your house (at least for the duration of the exclusivity period), they are likely to agree to a lower fee (typically 1-1.5%, plus VAT). Using a single agent also makes life simpler – you don’t need to co-ordinate viewings from multiple firms, provide several sets of keys, complete multiple anti-money-laundering checks, and so on.
On the downside, only listing with a single agent is likely to mean reaching fewer potential buyers, and consequently waiting longer for a sale. This is less true nowadays than in the past, given the rise of the big property portals: most agents will list on Rightmove and/or Zoopla, which means a lot more eyes on your property. However, the portals are still no substitute for an agent with a good list of applicants (potential buyers). In fact, we estimate that 50% of the interest in your property is likely to come from the existing applicant list of the agent rather than people who see it online. Another thing to bear in mind is the lack of flexibility: if the agent turns out not to do a good job, you are stuck with them for the duration of the agreement. Even if you turn to another agent or sell privately during this time, you will still be liable for the original agent’s fee. Make sure that you study the agreement carefully before signing: it’s not unknown for agents to specify sole selling rights for as much as a year.
One advantage of using more than one estate agent is that the firms will be competing with each other to secure the commission. This may mean they will work harder and faster to sell your home than a sole agent who has the safety net of a long exclusivity agreement. A second benefit is that each agent will have their own list of potential buyers. A good estate agent will send details of your property to buyers who might not have thought of searching in your exact area – so they are unlikely to find it in online searches.
The chief disadvantage is cost: multi-agent fees are typically about double what a sole agent would charge (2.5%-3% plus VAT). Of course, if you can sell more quickly or for a higher price using multiple agents, you could still come out ahead even if the commission you pay is greater, but you need to consider the cost versus the benefit. Another downside can be the hassle factor of dealing with several agents: while their competitive nature may help in securing a sale, it might also result in them pressuring you to accept a low offer from one of their applicants, rather than wait and see the sale go to another agent.
A joint sole agency agreement tends to be used with more unusual or high-end properties: for example, a prime country house in the Cotswolds might be marketed with a local agent but also with a big national firm that can generate interest with press coverage and by targeting overseas investors. For more run-of-the-mill property, this approach is less likely to be useful.
The fee you pay for joint sole agents is likely to be higher than for a sole agent but lower than for multiple agents. Generally, the two agents will agree to share the commission, because they are working together, rather than in competition. Although the successful selling agent may get a greater share of the fee, there is still the risk that the agents might work less hard in the knowledge that they will still get paid if the other company secures a sale.
There is no one-size-fits-all answer. It will depend on a number of factors: the uniqueness of the property, the state of the market, and whether you are in a hurry to sell or can afford to wait for the best offer. For many vendors, going with a sole agent at the outset is a good option, provided they can secure a competitive fee and an exclusivity period that is not too long. Once an agent has made the initial push to sell your home and exhausted their contact list, they may lose impetus and focus their energies on newer listings. Typically, high-street agents only sell 50% of the properties on their books. If you are unsuccessful with a sole agent, then consider relisting with multiple agents.
Movewise was born out of a belief that there had to be a better way to sell property. “Look at property developers,” says Movewise CEO Tom Scarborough. “They would never go with a sole agent for 12 weeks. They list with multiple agents and manage them on their own terms. So why do private sellers, who are mostly incredibly inexperienced in selling property, go with sole agents when the entire professional sector, who have to make a living from this, go for the ‘managed multi’ approach?”
Movewise gives you the benefits of using multiple agents to sell your property, but without the hassle and expense. You sign a simple agreement with us, agreeing a fee that is comparable to a typical sole-agent commission, and we find the best agents to sell your house. Because we take the photographs, draw up the floorplans and negotiate with the agents, switching to another agent, or adding another, is quick and easy. The price you pay stays the same however many agents you use, and you deal with the same person throughout, saving you hours of hassle, phone calls and emails. And while our technology and expertise will suggest the best agents to instruct and when it is time to switch, you remain in control and are free to make your own decision.
All this means that you sell faster, and for a higher price: typically two months faster and for 3% more money.
To find out how Movewise can work for you, call us today.