Sole Agency vs Multi-Agency
The real estate industry can be rather intimidating when it comes to knowing what deal to opt for and what move to make. With real estate agents and brokers at every corner offering you new deals and providing promises of the perfect service as a seller you can start to feel overwhelmed by the whole community involving real estate brokers and the whole selling process in general, this is why it is highly important for you to make sure you do your research before diving into a business or commercial agreement with any sort of a real estate professional.
What is Sole Agency (In the world of real estate agents)
Let’s start with a brief introduction to one of the most common types of deals you will be offered by an agent or realtor when you wish to start the process of selling your dream home. Real estate agents seem to present agreements to clients when they wish to do business with them, the first or most common type of agreement you may be offered by a real estate agent would possibly be a sole agency agreement.
A sole agency agreement is when you provide one and one singular and sole agent with the complete right for the marketing and sale of your property. In a case like this, the right for you to pay the agent remains intact even if you yourself are the one who finds the buyer. This basically a licensing agreement where you enter into a contract with a single broker and hand them the sole right to go through the process of completing the sale of your home within the luxury of the given time period in the contract.
What is Multiple Agency (When dealing with a real estate agent)
Moving on to the second most well-known and common type of deal when it comes to the home buying or selling process. Multiple Agency, the term is brought up regarding an agreement where you (the seller) is appointing multiple real estate agents for the marketing and selling process of your property.
In this sort of an agreement you appoint a group of agents either independently or through the course of commercial real estate industries to find buyers for your listing and in the end, you must pay the agents a secure fee that is decided upon during the formation of the contracts and paperwork with the brokers. In a multi-agency agreement, your property is in the hands of multiple agents instead of just one and hence it is known to be a rather fast method of finding customers.
What is the Difference between Sole Agency and Multi-Agency Agreements (Working with a real estate professional)
Now that we have taken the time to thoroughly discuss both sole and multi-agency agreements let’s try to move forward in an effort continuing education on the topic and be well prepared for the next step to take regarding the sale of your house. It’s time to compare both the agreements and try to explore the differences between the two.
While both the agreements seem pretty similar from the distance when one begins to take a closer look at the services being offered through realtors and real estate brokers in national association the differences in the buying and selling process start to come out slowly.
Key Differences Between the two (generally in commercial real estate industries
Let’s discuss some of the major factors and key differences between both the deals involving interest as well as benefits for the real estate agent, buyers as well as sellers.
-
The number of realtors working
One of the cores and main differences between both sole and multi-agency agreements is the factor of the number of professionals working on the marketing and selling of your house. When you sign a sole agency agreement it is just one sole broker or real estate agent who is in charge of the search for listings to be sold. However, when you sign a multi-agency agreement you fall in association with multiple realtors and sometimes even buyers for sale or rent of the listings.
-
The difference in the value of the interest being paid
When you work with any national association related to real estate you are often entitled to a transaction of funds as a fee for the application of their expertise. There is definitely a difference in the fee you pay to the agent or realtors who take responsibility for the commercial sale of your property.
For a sole agency agreement, the charge for benefits and commercial legal work is around 1-2%. This amount is for the sole real estate agent working for you.
However, when it comes to a multi-agency agreement the realtors working for you usually receive around 2-3.5% in benefits for their work and expertise, this rate may vary according to the deal you make and the national association of real estate you choose to work through.
-
The difference in the contract you sign with professionals
The contract is a key factor, everything in the real estate world pretty much depends upon the paperwork and what it contains. In order to have a contract with your real estate agent or group of realtors in your support, you must make sure all the conditions are read through in the process of home buying or selling.A contract has a high stance even in legal terms some acts and agreements are rather strict compared to others, for example, the fair housing act. The contracts will defiantly differ in both cases. For a sole agency agreement, you will have just one contract to sign with your realtor as there is just one sole broker you will be working with. As for a multi-agency contract, you will need to be a little more attentive to the material and ethics of the paperwork as you will be dealing with multiple realtors for the sale of your dream home.
-
Research regarding the real estate professional you hire
There is also a big difference in the time it takes to hire multiple real estate brokers. Think of yourself as someone who is in search of a house to buy or rent. You will obviously have a list of requirements to meet such as location, neighborhood, value, and address among many others. the same is the case with finding the perfect realtor for the marketing of your listing.
It is generally easier to just look for one sole realtor to meet your requirements as compared to going through the process of finding multiple perfect realtors or brokers to do the job and support your needs in home buying or selling.
Some Pros and Cons of using multi-agency
Now that we seem to be pretty clear on the insight of what we are dealing with let’s take a moment to understand the leading pros and cons you may have to face when going for a multi-agency agreement.
Pros of a Multi-Agency Agreement:
-
Your property will gain more exposure
One of the highest benefits of working with multiple agents is that each one takes it upon themselves to highlight and advertise your listings. Whether it is on a website or a magazine the exposure works wonders in educating the public about your listings. It is seen as a great resource as you finally get to highlight the presence of your property in multiple widespread ways.
-
You will achieve multiple options of marketing/sale
Another aspect that you achieve when you opt for multiple agencies is the factor of an increase in options for marketing. Different agents have different ideas for marketing some may just market the property while others may also bring great attention to the neighborhood and location of your home as a way to get more traffic, either way, it is considered a luxury to have more options, especially in the search more buyers. Agents and realtors are well up to date with the trends and can be trusted to lead the proper form of marketing in their own ways.
-
You will be introduced to more tips and tricks of sale by more realtors
The more people you have onboard the wider the number of tips they have to offer you will become. The luxury of having to choose from many options is often what helps you to not get exhausted yourself and to just relax as the work gets done by the professionals.
-
The process of selling will be rather fast-paced
When you go with multiple agents to work on your listing it’s often easier and faster to search for the buyer you need. The work is being done by many realtors and the process of in-office work seems to be easier as well.
Cons of a Multi-Agency Agreement:
-
You may face over-exposure
Sometimes working with too many real estate professionals can cause over-exposure. This is when every website is blasted by your property and suddenly it seems as if the residential area is too crowded or the listing is no longer exclusive anymore. it is important to avoid over-exposure when working with multiple brokers.
-
Competition my derail the focus of your realtor
Another one of the tips to avoid conflict is to make sure that brokers you are working with do not end up competing with each other too much. Too much competition can lead to a loss of focus and it can cause workers to go towards a path that is no longer all about the search for a perfect client.
-
You will have to pay a higher amount to the realtor
One of the main downfalls of a contract like this is indeed the factor regarding a higher fee payment to the agents. While this contract comes with many pros you will have to negotiate and work on an agreement on the payment of fees in office before the agreement is signed so that you do not get shocked by the percentage you will have to pay once the deal is made.
Which one is better between the two?
Trends come and go and so do agreements as well as advice. When you are in the moment and have to make a decision it often feels difficult to choose. Even with all the information at your hands, the choice can be a rather hard one to make, which deal do I become a member of?
Well, there are many ways to navigate through this cloud of doubt and lead yourself to the luxury of a decision, the following are some methods you can try when making a decision.
Methods to help make a decision:
-
Consider all options
Never go straight towards making a decision when it comes to something serious. Make sure to gather data on the options you have, once you know what you need to choose from you no longer have to keep searching and the decision-making process becomes a step clearer for you. Layout all your options and write them down if you need help focusing better.
-
Weigh the pros and cons
Once you have your options laid out before you the next step is to compare the data you have gathered and weigh out the pros as well as the cons for each option. It is pretty simple, rule out each option that seems to have more cons than it does pros and soon you will find yourself with the last of your options becoming narrow and that will make it easier for you to choose.
-
Have some faith in yourself!
Finally, with the knowledge by your side and the information backed up with data you must also not forget to simply follow your gut and go for the choice you believe will suit you the best. Have a little faith in your own self and learn to rely upon your own thinking patterns as well as beliefs.
Conclusion
With your held high it’s time for you to take on this process as the doubt has been lifted off of your shoulders! It is indeed time for you to make a choice, with everything you have gathered and the facts as well as figures laid before you, decision-making should no longer be an issue. You are defiantly prepared to stride into the real estate world.
If you’re interested to become a successful agent, don’t hesitate to be a part of our amazing team!