Should I use multiple agents to sell my home? The pros and cons
When selling you home through an agent, you can choose between sole, joint and multi-agent agreements. What are the pros and cons of each, the cost implications and which option will lead to a faster sale?
A sole agency agreement is when you enter into an exclusive contract with one estate agent to market your home. During the contract period, you will be tied in with your chosen agent.
Contract periods usually vary between two and five months. Three months is usually the agent’s default marketing period, but you can negotiate. There may also be a notice period.
Estate agents typically charge between 1% and 2% (plus VAT) of the final selling price for sole agency.
Joint sole agency
Something of a hybrid between sole and multi-agency, joint sole agency is when two or more agents agree to market your property simultaneously and split the commission in the event of a sale.
When the property exchanges contracts, both agent A and agent B get paid a commission, regardless of which one found the buyer.
With a multi-agency agreement, you can concurrently use as many agents as you like to sell your property. The contract period and commission level could differ between agents. You could even enter into contracts with additional agents at any stage.
Fees for multi-agency are typically 2.5% to 3.5% (plus VAT). The higher fee is justified on the basis that any single agent has a reduced chance of clinching the deal.
As with any legal contract, you should read the terms and conditions carefully. Estate agent sharp practice is not as common as some would suggest, but it is still possible to be caught out by certain potential clauses (usually negotiable if you pick them up):
Sole selling rights
You won’t usually have to pay commission to the agent if you find your own buyer during the contract period.
However, some sole agency agreements include a ‘sole selling rights’ clause. Under this clause, you would have to pay the agent’s commission if you accept an offer from any buyer, whether the agent introduced the buyer or not.
On the face of it, this seems unfair. Agents might argue that they will have still done all the work and should be entitled to their fee. Some sole selling rights clauses allow for a 50% fee to be paid to the agent if you find your own buyer. You can usually negotiate this clause away if you raise it with the agent.
Although uncommon, some agents include a ‘future liability' clause that could result in you paying double commission. For example, if you terminate your agreement with agent A and subsequently sell through agent B, agent A may claim that they originally introduced the buyer and claim their fee. In this scenario, you would end up paying commission twice.
The word ‘introduced’ is fuzzy in legal terms. Agent A might claim they introduced the buyer if they did no more than provide the prospective purchaser with a set of particulars.
This clause could apply even if the agreed marketing period has elapsed with agent A.
Ready, willing and able
No sale, no fee is the industry standard in estate agency. With most no sale no fee agreements, if your sale does not complete, you don't pay any agents fees.
However, some no sale no fee agreements include a ‘ready, willing and able’ clause. Under this clause, you would have to pay the agents fee, or a percentage of it, if they introduce a buyer who is ready willing and able to proceed, even if you decide to withdraw from the sale.
See also: Estate agents’ tricks of the trade
Which type of agreement should I choose?
If you go down the multi-agency route, you will, on average, end up paying an additional 1.5% plus VAT in fees if you sell. On a property sold for £300,000, this equates to an extra £5,400 at a time of a lot of other expense.
Advocates of multi-agency argue that this additional cost is justified for the following reasons:
Your property will be seen by more buyers
Whichever agent you choose, your property will end up being advertised on the major property portals, such as Rightmove, Zoopla and OnTheMarket. For most buyers, the portals are where they first become aware that a property is on the market.
Proponents of multi-agency point out that agents will have their own databases of potential buyers. They argue that agents will be calling their contacts before the particulars are dry. Agents may well waste no time in calling applicants, but in reality, these applicants are rarely proprietary.
Gone are the days when potential buyers trek up and down the high street registering their details with multiple estate agents.
Some agents are better at presenting properties
The standard of presentation of property between agents varies considerably on the portals. Some agents upload scores of high definition images, virtual house tours and detailed floor plans. Others provide fewer photos of lower quality and floor plans without total square footage.
If you choose multiple agents, there is a better chance that one of them will present your property to a higher standard.
However, it is easy to see how a shortlisted agent presents other properties, and your choice of the sole agent can factor this in.
Competition leads to higher offers
The theory has it that multiple agents locked in competition with each other will extract higher offers from buyers. There have been years when the market was so frenzied, so geared in favour of the seller, that multiple agents could play buyers off against each other.
Post-COVID, and despite the apparent recovery, the property market is now very different.
There will always be competition for the right properties, but buyers will not be willing to pay over the odds. Even if a buyer does make an inflated offer, the mortgage lender will probably down-value the property.
A cursory glance at the portals shows that properties are often still listed with multiple agents. Developers and investors often sell through multiple agents. Do they know something that private sellers don't?
The main reason that some property professionals use multiple agents is that they are regular clients and have access to preferential rates. As ongoing customers, they can take advantage of the (debatable) benefits of multi-agency without the cost.
Potential buyers can find it both irritating and confusing when they see the same property advertised with lots of different agents.
Perhaps one of the biggest negatives to a property listed through lots of agents at the same time is it just looks desperate - especially when there are numerous for sale boards at the same property. If the buyer senses you are desperate (or perhaps that there is something wrong with the property) they will be inclined to make a lower offer.