It is like having a football team with 20 players instead of 11: The more people, the more chances to score right?
Actually, it is not quite that simple. Here is what you need to know before you use a whole army of agents, or give a property agent exclusive rights to market your property, be it for sale or renting out.
THE PROS OF MULTIPLE PROPERTY AGENTS
The benefits of having multiple property agents are that: You can theoretically reach a wider group of buyers; you are getting a wider perspective; and you can access different buyer demographics.
The benefits of having multiple property agents are that: You can theoretically reach a wider group of buyers; you are getting a wider perspective; and you can access different buyer demographics.
1. You can theoretically reach a wider group of buyers
This is the theoretical “shotgun effect”. If one property agent with exclusive right can find two interested buyers/tenants, 10 property agents can find 20. This remains one of the core reasons why some sellers/landlords want multiple agents: They think they can close the deal a lot faster.
But further below, we will explain why we think this theory is outdated.
2. You are getting a wider perspective
More agents often mean more feedback. You will get a wider range of opinions, such as on what renovations to make to attract more tenants, or which nearby amenities to highlight, or how much you should set your asking price. Since each agent potentially brings a new insight, you could learn a lot about your property that you had not considered.
The downside to this is analysis paralysis. It is kind of like hosting a marketing meeting with 30 people, and ending up taking six months to decide on the colour of a product. You also need to remember that not all agents have equally informed opinions – that leaves it up to you to filter out the valuable insights from the rubbish.
3. You can access different buyer demographics
Different agents, in theory, cater to different types of buyers. By using multiple agents, you can market your property to multiple demographics at once. For landlords this would mean reaching different types of tenants, from foreign students to affluent single expatriates.
There typically isn’t a diverse demographic where buyers are concerned, so using multiple agents to reach different profiles is usually done by landlords who want to rent out, but are not sure which segment of the market they should target. Even though this sounds reasonable, we do not fully agree with this, for reasons described below.
THE DOWNSIDE OF USING MULTIPLE AGENTS
Back in pre-Internet days, the two positions – multiple agents versus an agent with exclusive rights – were more or less equal, but buyers now rely on online platforms to search for properties.
Changes in the way a property is bought and sold, coupled with new regulations implemented over the years that restrict the ways agents can market their properties, mean there is now more advantages to using an exclusive agent.
That is because: Almost all agents now use the same platforms to market your property; for regular residential properties; you seldom need access to niche demographics; prioritisation is more important than numbers; and multiple listings can confuse prospective renters or buyers.
1. Almost all agents now use the same platforms to market your property
Before the rise of online listings, marketing properties was less efficient. It mattered how many flyers your agent put out, how many cold calls they made, and which newspapers or magazines they advertised in. Multiple agents were more helpful in those days, as they were needed to cover more ground.
But today, most buyers go through the same online listings sites, or browse using the same apps. And because of the way internet listings work, you will reach roughly the same volume of potential buyers, regardless of how many agents you use. The Do Not Call registry and Council for Estate Agencies (CEA) rules against flyer distribution also helped concentrate agent marketing efforts on online portals.
(At most, having multiple agents will mean your listing gets posted a few more times, but that is also a drawback – see point four).
2. For regular residential properties, you seldom need access to niche demographics
It is commonly said that different agents can access different demographics. But the question you have to ask yourself is: Does that really matter for your property?
If you are trying to sell a property that is out of the norm – such as a S$15 million penthouse, or an industrial manufacturing site – then having a group of specialised agents can be important.
You will want agents who can access certain niche demographics (for example, one agent to target the super-affluent or one agent to target businesses buying properties). Each agent may also have personal networks they can tap on for potential buyers.
But for selling more mainstream properties, such as HDB resale flats or mass market condos, these specialisations matter less. The buyer demographics are not as niche, and most agents will be reaching out to the same pool of people.
For renting out properties, different demographics now rely on the same means — online portals — to find their rooms and units to rent, thus negating the need for multiple agents.
3. Prioritisation is more important than numbers
Because real estate agents are in sales, there is the old misconception that it is just a numbers game. Now that may be true for the agent in question, but sellers and landlords are always better off focusing on quality.
There is no point having five agents who can sell your property, if all of them put you last on the priority list (because they think someone else might get the commission).
Even worse, a non-exclusive agent might use your house as leverage to sell another property on his/her list. The agent might show a prospective buyer your house first, because he/she has access to it, after which they may bring the buyer to a better house, using the technique of contrast to pump up the perceived value of the second home. In short, you might get played if you use multiple agents.
4. Multiple listings can confuse prospective renters or buyers
This is why some agents hate listing houses, after another agent already has. Prospects get confused when they see the same property marketed by different agents – they may think some of the listings are old, or wonder if there might be something wrong about the house. They might even think it is a scam.
Put yourself in their shoes: Imagine if Agent A shows you around the house, and the next day you find the same property listed, but with Agent B as the contact — you may feel that you are being played.
So, stick to an exclusive agent if you do not want prospective buyers to start asking questions like “How come there are so many agents and it’s still not sold? Have all the other agents gave up?”
In general, it’s better to give one property agent the exclusive rights to sell or rent out your property. Given how properties are marketed nowadays, as well as buyer behaviour and mindsets, there is very little to recommend the multiple agents route. It is much better to switch agents if the current one is not performing. It is not hard to do, and it ensures every agent you engage is more committed to market your property.
This article first appeared on 99.co.
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Read more at https://www.channelnewsasia.com/news/singapore/exclusive-rights-multiple-property-agents-which-is-better-10887762