Costly pitfalls of using multiple agents
Article by ImmoAfrica
There are only a few markets in South Africa that are as competitive as the real estate market. Especially now the economic and political conditions have caused buyers to become extra cautious before purchasing property.
Well-priced homes might be selling within a reasonable timeframe, but some sellers are enlisting multiple agents in order to sell their homes faster and avoid the pressure of market.
This is a huge mistake because sellers who make use of more than one agent, open the door to a world of potential crises.
Here are four reasons why a home seller should stick to working with only one agent:
#1 – Double commission claims
There is a real danger behind using multiple agents to sell the home when it comes to commission.
Sellers might be held liable for double commission if more than one agent will claim responsibility of arriving at the sale of the home.
Buyers might have seen the property with one agent, but might discover that another agent is listing it at a better price. Buyers will then naturally make an offer via the agent who can give the house at the best and more affordable price. However, the agent who introduced the buyer to the house in the first place has just as much right to the commission as the agent who is selling it (’cause and effect’).
Needless to say that this can turn out to be quite expensive for the seller.
The seller will be left in a situation where he will have legally have to pay the full commission to both agents!
#2 – Creating the wrong impression
When more than one agent sells a property, the inevitable will happen: they will use different photos for the same house. This can create the wrong impression and it sends out the wrong message to the market.
Aside from confusing the buyers, it creates the impression that the seller is desperate to sell the houseand will accept any lowball offer that comes his way.
Listing one property with multiple agents will thus be more likely to lower the price that the market is willing to pay for the property.
#3 – Legal action around false expectations
Many sellers do not have the necessary information at their disposal about the binding nature of accepting an Offer To Purchase and they often don’t understand that they have signed a binding document, which could lead to legal action when a seller accepts two different offers from two different agents.
For example, a seller accepts an offer from an agent that has suspensive conditions like a bond that needs to be granted. This usually has a timeframe attached to it. Another agent might come with a cash offer which is more appealing as there aren’t any suspensive conditions to be met.
If the seller accepts the latter offer, the previous one does not fall away. In fact, it will take precedence, but the second agent can sue the seller for full commission should the suspensive conditions be met.
#4 – Danger in breach of security
Opening your home to strangers is dangerous in this day and age, but with multiple agents working the property, the risk becomes even higher.
Not all agents are as conscientious about accompanying potential buyers around the house or even meeting them for a viewing.
Plus, sellers should always remember that buyers are not loyal to agents and that all agents are in essence tapping into the same pool of buyers. In order words, an open mandate won’t necessarily mean more potential buyers.
Bottom line: sole or exclusive mandates really do work best for selling a home at a good price within a reasonable amount of time.