As an agent, if you’re ever asked: “Can I use multiple real estate agents?” by a vendor, providing a well-informed, confident, and polite answer can be challenging. From the vendor’s point of view, reaching a larger audience with double the workforce is understandably appealing. Finding the right way to point out the pros and cons of multiple-listing agreements is a skill that comes with good training and experience.
At Entry Education, we’re a team of real estate professionals and passionate educators who offer courses for prospective real estate agents that draw on extensive real-world experience. We arm our students with the knowledge and insight necessary to navigate any challenging scenario that presents itself in the real estate industry.
Entry Education deliver courses designed to help new real estate agents start the industry, and junior agents build on their existing skills. We love sharing the knowledge we’ve gained over time and offer all our students the opportunity to fast-track their careers in the exciting world of real estate.
In this article, we’ll outline the advantages and disadvantages of various real estate listing options open to real estate agents so that, as a new agent, you’re able to successfully choose the right option for each property and vendor you represent.
Multiple-listing agreements
Multiple listing agreements utilise multiple agents to sell a single property. These types of arrangements aren’t common in the modern market, and there are a whole range of reasons why they are disadvantageous for both the seller and the real estate agent. Having said that, whenever a real estate agent is faced with potential conflict, it’s important to remember that the seller has the final word on how their property is marketed, listed, and sold. Real estate agents can advise and guide, but ultimately the vendor has the final say as they are the ones who hold the title deed.
The advantages
A multiple-listing agreement may be sought by a vendor who wants maximum exposure for their property sale. The seller may feel that listing the property with just one agent would limit the property’s sales potential. Multiple listings shared by various agents are often marketed across many existing databases, possibly across a wide geographic area.
Under a regular exclusive sales agreement, one agent is responsible for the entire sales process from start to finish – including all marketing, open inspections, auctions, and sales negotiations. The advantage of a multiple-listing arrangement is that a single property is marketed to more potential buyers and could attract a buyer from outside the local market.
The disadvantages
While the seller might surmise that having multiple agents pushing the sale will mean a higher sale price, what a multiple-listing means, in reality, is vastly different. Often agents aren’t motivated to make the sale because all listed agents receive a proportion of the commission, whether they close the deal or not. Usually, one agent does all the work for little reward, while the other agents do nothing and receive the same income. There’s also a high potential for confusion and miscommunication when multiple parties are involved in a real estate sale.
Historically multiple-listing agreements were advantageous to attract buyers from outside a set geographic area. In the past, this was important, especially when a remote or prestigious property was put up for sale. In today’s market, this is less relevant as online listings are open to being viewed by anyone interested and the need for multiple agents has dwindled. In today’s market, high-quality photos and an online listing are necessary to create buzz and generate a high sale price according to local market conditions.
Open listings
Even more challenging than a vendor asking: “Can I use multiple real estate agents?”, is a seller who requests an open listing. An open listing allows the vendor to retain to right to sell the property while the property is listed with multiple agents. If the seller pursues a buyer and sells the property themselves, the agents all receive zero commission. The only out of pocket expense in this scenario for the buyer is any marketing costs incurred in the sales campaign. This approach often means that the seller is highly motivated and will do a lot of the real estate agent’s work for them. It also means that the property won’t receive the attention it deserves and won’t be marketed effectively.
Making a property seem highly desirable is one of the primary roles of a real estate agent, and too many competing parties may lower the perceived value of a property, affecting the final sale price and the agent’s commission. Serious buyers are usually keenly aware of the market around them and are sensitive to the slightest suggestion that a property is defective in any way. If they perceive that a property is listed with multiple agencies and that the seller is heavily involved in the process, they often believe that they can successfully purchase the property below market price. If multiple buyers believe the same thing, then the property won’t sell for its worth as there will be no pressure on either party to increase their purchase offers.
Exclusive listing agreements
So, can you have 2 estate agents selling your house? The answer is yes, it’s possible and legal. The real question is whether it’s advantageous.
Exclusive listing agreements are more popular than any other agreement type in the current Australian market. Exclusive listing agreements give only one agent permission to sell a property for a set amount of time. The rules of this arrangement usually mean that the seller isn’t free to engage a second real estate agent, but if the seller isn’t happy with their agent, they’re free to change agents after the allotted amount of time has passed.
Although more expensive for the seller, an exclusive listing agreement means that the listed real estate agent is guaranteed the whole commission when the property sells, whether that’s at auction or throughout a sales campaign. This type of arrangement is advantageous for both the agent and the seller because it guarantees the agent will work hard to close the sale. It also means that potential buyers will have no cause to assume they can buy for below market value as the agent will be fully aware of what the property is worth and will be working hard to get the best price possible.
An exclusive arrangement between two parties allows for candid and open communication between the vendor and agent without pressure from multiple agents trying to make a sale. It’s important to point out to buyers asking: “can I use multiple real estate agents?” that there are cons to that arrangement and communicating those disadvantages in a firm but respectful manner. Some of the advantages of an exclusive listing you could point out are that:
-An agent will prioritise a listing if they are the sole commission earner for the sale.
-An agent will give excellent and honest advice if they know a higher sale price means a higher commission for them.
-An agent will pay more attention to creating a thorough marketing strategy if they’re guaranteed the full commission.
It’s essential to have the agent on your side as a seller, and although it might seem easy, selling a property is hard work that requires the skill, grit, and experience of a qualified real estate agent.
Get real-world training with Entry Education
Selling property for a living is a rewarding and challenging career that will open new doors for an agent willing to put in hard work. Accessing training that qualifies you under the government regulatory framework in the state you live in is an essential first step. Choosing a course that prepares you with the requisite knowledge and skills to negotiate the complex and competitive Australian property market is also important. Signing agreements, building a reputation, and dealing successfully with buyers and sellers are all challenges we prepare you for at Entry Education. Our real estate courses are all state-specific, so you can rest assured your new qualification will the tailored to the local market.
Carefully choosing a quality real estate course is the best investment in yourself and your future career that you’ll ever make. We know from experience that selling a property isn’t just about the steps you take to market, list, and open that property for inspection. Interacting with multiple interested parties and creating an appealing campaign are equally important and hard to teach. There’s no time like the present to take the first step to a new life. Get in contact with our friendly team at Entry Education today – we’re here to answer any questions you have about coursework, payment plans and taking that next step in your real estate career.
