Once you’ve decided to sell your home, choosing the right estate agent to help you is a top priority.
But one of the big choices you need to make is whether to opt for sole agency, where one firm has the exclusive right to market your home for a fixed period, or multi agency, where you get more than one firm to help you sell.
The choice you make will affect the amount you pay in fees and could also potentially have an impact on the amount you receive for your home.
Sole agency is the most common type of estate agent contract, and most people start with this arrangement, but here we take a look at the pros and cons of both…
Sole agency
What does it mean?
Just one agent acts for you for a certain period. They receive all the commission on a sale, but if the property hasn’t sold at the end of this period, you’re free to use other estate agents.
Pros
- The charge is usually between 1.5% and 2%, which is cheaper than multi agency. Agents will agree to lower commission with sole agency, as there is a higher chance they will make the sale.
- If you find a buyer yourself privately, there is no commission to pay unless you have agreed sole selling rights with the agent. It's an increasingly rare arrangement, but if this is the case, you must pay commission regardless of who finds the buyer.
Cons
- Historically you’d receive less exposure than you would with more than one agency. However, with most buyers using sites like Zoopla, this is now less of an issue.
- You may end up with lower offers than you would with multiple agents.
- You will sign up to a ‘lock-in’ period, usually 12 weeks, meaning it will be hard to switch agents if you’re unhappy.
- If you do sell through another agent while still under contract, you could find yourself having to pay commission not only to the agent who sold the property, but also to the original sole agent.
Multi agency
What does it mean?
You can instruct as many agents as you like. They will all act for you at the same time and the one who finds the buyer earns the commission.
Pros
- More agents pushing your property historically used to mean more exposure, but thanks to buyers predominantly using sites such as Rightmove and Zoopla, this is less pronounced.
- You may receive higher offers.
- As agents will be competing against each other, this can speed up a sale.
Cons
- The fee may be closer to 3%.
- All agents will be competing against each other, potentially making the process quite chaotic.
- An inherent risk agents may try and get you to accept a lower offer so they secure the commission.
- As several agents will have keys to your home, the viewing process could be more disruptive.
- If buyers see multiple listings for your home with different agents they may be put off.
Top tips
- Most people start with sole agency and only move to multiple agents if their property doesn’t sell quickly.
- While the normal lock-in period with a sole agent is 12 weeks, shorter periods of six to eight weeks can often be negotiated.
- Multi agency may be the better option if the importance of a fast sale outweighs increased commission.
- Joint agency is another option. This is where you instruct two agents, who will come to an agreement over commission. ie. It may be shared irrespective of who finds the buyer. It’s a more common option for selling overseas property when you want to appoint a specialist national agent as well as a generalist local agent. The fee for joint agency tends to be around 2%.
So that concludes this episode of Ask the Estate Agent Podcast. You can contact us anytime using the links below:
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Source: Zoopla
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