Ready to sell your house and level up to a bigger space? Or perhaps looking to rent a place?
A possible option to is to engage a property agent to help you with your property transaction. In fact, some of us may even engage more than one agent (yes, you can do that).
If you are deciding between engaging one agent or multiple agents and are wondering what some of the considerations are for each approach, read on to find out how to go about doing so and what you need to take note of.
How to engage agents
The first thing you should know is when you engage an agent, you sign an agreement with his/her agency and not with the agent directly.
Regardless of whether you decide to engage one or more agents, it is recommended that you sign the Council for Estate Agencies’ (CEA) Prescribed Estate Agency Agreement with the agency or agencies.
The CEA has eight different agreements that cover all types of residential property transactions, from sale and purchase to lease. Within these eight agreements, there are exclusive agreements and non-exclusive agreements.
As a legal document, the agreement protects the interests of all parties by spelling out details that include:
- The duties of property agencies and agents
- The disclosure of any potential conflict of interest
- Prescribing the commission payable to the property agency only upon completion of the property transaction
- Indicating if GST is included in the commission amount stated
This agreement should be drawn up and signed before any work is done. An added advantage of the Prescribed Estate Agency Agreement is the access to CEA’s Dispute Resolution Scheme should there be any contractual disputes.
This Scheme offers mediation or arbitration through centres approved by CEA, providing further peace of mind.
Differences between an exclusive and non-exclusive agreement
If you intend to enter into an exclusive agreement with an agency, here’s what you need to be mindful of:
If you intend to enter into a non-exclusive agreement with any number of agencies, there is no validity period and you only pay the commission to the agency of the agent who eventually closed the transaction.
What do these all mean?
If you intend to engage one agent for your property transaction, you can choose to enter into either an exclusive or a non-exclusive agreement with his/her agency.
Choosing a non-exclusive agreement keeps your options open, in case you decide to appoint another agency later on.
If you are sure that you want to engage multiple agents from different agencies for your property transaction, you should sign a non-exclusive agreement with each agency.
Which is better – one or multiple agents?
“Better” is subjective; it depends on your needs and preferences.
With more agents working for you, you potentially have access to a larger pool of interested parties. In doing so, you might be able to complete your property transaction faster.
However, you will need to correspond with multiple agents separately to obtain updates from each of them. For example, if you’re a seller, you will need to compare the offers received through multiple agents at different times.
You also have to be prepared to coordinate their efforts to prevent overlaps. For instance, if you’re a seller, you will have to deconflict your schedule when receiving viewing requests from different agents.
Due to these considerations, some people prefer to engage just one agent for convenience. Additionally, if you are in an exclusive arrangement, the agent is likely to be more incentivised to devote more time and resources to your property transaction, due to the higher certainty of receiving a commission.
When signing the exclusive agreement, it is recommended that you append a Commitment to Service document.
It lists the breadth of services offered, such as the frequency of advertisements and “open house” sessions. The agreement can be terminated if your agent does not meet the pre-agreed commitment.
ALSO READ: 7 useful questions to ask your property agent before you buy or sell your property