Sole agency vs general listing

VICKI HOLDER Holder argues why a sole agency beats a general listing hands down.

Some people are under the misconception that the more agencies they list their property with, the greater chance of a quicker sale at a higher price.

Vendors imagine a general listing will result in a scenario where desperate real estate salespeople fight among each other to find a buyer so that they can claim the commission on the property.

Unfortunately, this rarely happens. Initially there might be a flood of salespeople who come through the property and drop their business cards on the table, because they're nosy. But all this frenetic activity, which at first seems so positive, will soon stop, because salespeople prefer a vendor's commitment before they give a property priority. The general listing can rattle around in the "too hard" basket and the vendor is left wondering why nobody is coming through their home.

Vendors have a much better chance of success selling a home through a sole agency, where the owner engages one company and gives that company exclusive rights to sell the home.

Paul Barnao, of Barfoot & Thompson in Remuera, explains that the main point of difference between sole agencies and general listings is the level of responsibility and service.

"When a vendor lists their property as a general listing, it goes into a pool with other general agencies," he says. "The real estate agent has no specific responsibility to look after that property."

Because there's no commitment from the vendor and certainly no budget for marketing, there's no guarantee of ever selling or the agent being paid. What's the point of the agent working hard, putting together brochures, promotional material and feedback reports when the property could be sold by someone else tomorrow? Unless they are a newcomer to the business and desperate for a sale, agents tend to put the general listing to one side and concentrate on the listings they know are theirs alone.

The lack of priority given to the property often means it lingers on the market, and the longer it sits there, the more it gives prospective buyers the impression there's something wrong with it.

When a sole agency is accepted by a salesperson or agency, they undertake to give that vendor service, says Barnao.

"The agency accepts responsibility for getting the property sold for the best possible price," he says. "The salesperson reports back to the vendor regularly, often daily, with not only their own feedback, but also the feedback from other salespeople working for that agency."

Given a sole agency, salespeople work hard to get to know the property intimately. They bring fellow team members through and explain the selling points of the property so they too can be on the lookout for interested buyers.

For each sole agency, the salesperson prepares a marketing campaign that usually includes signage, flyers, cards to be displayed in the office window, newspapers and magazine advertising, as well as internet advertising. General listings, on the other hand, are rarely advertised by the real estate agency, so the lack of exposure to buyers is a major handicap to a successful sale.

"Personally, I only work sole agencies, preferring the close relationship that develops between me and the vendor," says Barnao. "By taking on up to six sole agencies at a time, I can give those vendors excellent service."

Another important aspect to consider is the support a committed real estate agent can give vendors when negotiating an offer. Because they are working hard to find the best deal for vendors, their aim is to find more than one interested buyer and to play them against one another to help push the price up as far as it will go.

Once a salesperson brings a buyer for a property on a general listing, there's no motivation to go and find another buyer to negotiate with. The only negotiation tends to happen between the vendor and that single buyer. Keen to make their commission before someone else, the salesperson will put pressure on the vendor to accept the first offer on the table.

The salesperson might say to the vendor: "If you don't accept this offer, then the buyer will not be interested and I don't have another offer." Unless vendors are prepared to keep on waiting, it's likely the price of the property will be forced down.

Without the strong advocacy of a sole agency, vendors can be in an potentially insidious position when trying to sell their home.