Open vs Exclusive listing in current slow market

[mrshandyandy888]

Hi there,

We are thinking of selling off another IP. All our other sales have gone through with an exclusive listing. I am wondering if there is any advantage by listing exclusively with an agent than open, especially in this slow selling market. My theory is that the agents are keen to sell ANYTHING, so an open listing they might be working as hard to sell as an exclusive, a sale is a sale... what are your thoughts?

Is there more fees involved in an open?

 

[mrshandyandy888]

Ok then. Will find out by doing instead of asking..

 

[ziggy2214]

Hi mrshandyandy888

Have you listed your property and did you go for an exclusive listing?

 

[mrshandyandy888]

Well, we listed open. It probably annoyed the tenant no end to have a few sales people in and out and 2 lots of open homes every sat, but in the end we have it under contract (pretty much unconditional now). We did have another contract through first but that didn't last long, and then this current contract pretty soon after. I think an open listing works well if you have active real estate agents on the job. We had 3, 2 of which were actively working.

We did also drop the price a couple of times which no doubt helped sell it as well.

So all in all took about 4 months to be under contract unconditionally, with another month to go til settlement. Not too bad considering the market and the issues the house has.

 

[ziggy2214]

mrshandyandy888

Thank you for the update.
From our experience we found that agents don't like signing open selling contracts.

Some people also say that having multiple agents isn't good because no single agent puts full effort in selling your property and it could also be seen as an act of desperation by the vendor.

Have you sold other properties and did you notice any difference in performance?

 

[mrshandyandy888]

Yes we have sold other properties via exclusive listing, and still have other properties on the market as exclusive. They have been under completely different markets/circumstances so hard to compare, but really probably not much difference.

I think with the open listing, we created a bit of competition between the agents which was a good thing in some respects, but a pain in the bum dealing with them and the tenant etc.

We were always prompted to go exclusive by one agent, but alas he was not the one to get the contract. They both put in similar effort from what I can see, apart from a special listing on re.com.

In saying that agents don't put in the full effort in an open listing, I think that is a bit misleading. The agents worth their salt will put the effort in to get the sale, a sale is a sale. As I mentioned earlier, we have properties on the market where the agent is not doing much to get it sold.

And yes, I had a few agents not sign on the open listing, but they are obviously well enough off with properties and sales..

I think as long as you get a good agent (not sure how you are supposed to know before you sign) you should be right. If you are under exclusive, and you are not happy, then maybe trying swapping to another agent..

If you are living in the property being sold, then an open listing wouldn't be a problem, having a tenant makes an open listing painful.

 

[ziggy2214]

mrshandyandy888

Thank you for the feedback, much appreciated.

 

[priscilla]

We will not accept open listings as I feel if we make an investment into advertising and committing resources and time to marketing a property for sale we deserve some form of commitment in return. We do not charge separately for advertising so any costs involved in promoting your property come from our pocket. If we don't make a sale we are stuck covering that cost, therefore an open listing is just too risky unless those costs are borne by the seller. Agents don't need any further motivation of multiple agents to make a sale and will (or should) always provide a higher level of service to Exclusively listed clients. I believe most agencies would pay a lesser percentage of commission to salespeople for Open listings than Exclusives which in itself would encourage the salespeople to push other properties for sale in front of an open listing.

Whilst there are many people on this forum who are quite scathing about REA and the RE industry in general most of us do try hard to do the right thing our business is highly reliant on referral business, as such our reputation is everything.

RE industry is the only industry stupid enough to cover a sellers costs with no guarantee of recouping your money (in locations where Vendor Paid Advertising is not the accepted practice). if you go to sell anything else you own you would always pay for the advertising up front.

In regard to open listings as a vendor I would also be quite careful about over exposure to the market place, I believe a property with 2 or 3 different agents signboards, internet listings etc can make a seller look desparate or make the market think there is something wrong with the property.

 

[evand]

Dont agencies have a flat fee rate with media such as re.com.au and local papers etc.

So that it doesn't matter how many properties they list, they pay the same fee.

Its only when the vendor wants additional advertising/promotion they will pay for it on top of the commission.

And are the days of RE agents advertising rebates and kickbacks over? What a scam that is.

RE industry is the only industry stupid enough to cover a sellers costs with no guarantee of recouping your money (in locations where Vendor Paid Advertising is not the accepted practice). if you go to sell anything else you own you would always pay for the advertising up front.

 

[mrshandyandy888]

I am not bagging realestate agents at all. Most do the work they are supposed to , some just go along for the ride and hope to get lucky.

Basically, most REAs just do the normal advertise on re.com and their business and do open homes. Those who are willing to go the extra mile and pay for extra advertising usually get the sale.

Half agree with over exposure, but in saying that, you have to do the checks with any house you purchase regardless, to make sure it isn't a dud. And to look desperate as a vendor, well, that would bring more offers in wouldn't it, knowing that it needs to be sold ASAP??

 

[priscilla]

Dont agencies have a flat fee rate with media such as re.com.au and local papers etc.

So that it doesn't matter how many properties they list, they pay the same fee.

Its only when the vendor wants additional advertising/promotion they will pay for it on top of the commission.

And are the days of RE agents advertising rebates and kickbacks over? What a scam that is.

Yes you are correct agencies do have a flat fee rate with internet portals such as realestate.com etc my point was that why should fees that the agencies pay (which is not peanuts I can assure you) be utilised for someone who is not prepared to make a commitment to your agency, there is costs for us to upload properties to the internet (photography, admin costs etc) which chances are in an Open Listing situation you may not have a chance to recoup.

I know with our local paper adveritisng we would never advertise an open listing. Even signs have a cost to provide and have put up and taken down (we use a contractor to do this) and in many cases signs are lost/stolen/burnt etc and therefore not reusable.

I think the agency kickbacks/rebates etc you refer to would only be relevant where an agency chanrges for advertising e.g. they offer an ad for $250 when the cost to them is only $150. As we don't charge for that form of advertising to exclusive clients it would not apply. In NSW there is a place on the agency agreement for these to be disclosed so an agency is placing itself at risk of prosecution if they do practice that form of conduct.

Half agree with over exposure, but in saying that, you have to do the checks with any house you purchase regardless, to make sure it isn't a dud. And to look desperate as a vendor, well, that would bring more offers in wouldn't it, knowing that it needs to be sold ASAP??

Yes you would do the checks with any purchase. Looking desperate as a Vendor my bring in more offers but it is highly unlikely they will be good offers, they will be from bargain hunters. As an open listing almost certainly you will be pressured by agents to accept their offers whereas an exclusive agent is likely to work harder to achieve a better result.

Achieving a good price for exclusive listings should be the goal of all RE agents, ours is a results based game, the better the result the more chance of future business. An Open Listing puts the pressure back on the agent to get a quick result not necessarily the best result.

 

[mrshandyandy888]

[/QUOTE]Yes you would do the checks with any purchase. Looking desperate as a Vendor my bring in more offers but it is highly unlikely they will be good offers, they will be from bargain hunters. As an open listing almost certainly you will be pressured by agents to accept their offers whereas an exclusive agent is likely to work harder to achieve a better result.

Achieving a good price for exclusive listings should be the goal of all RE agents, ours is a results based game, the better the result the more chance of future business. An Open Listing puts the pressure back on the agent to get a quick result not necessarily the best result.[/QUOTE]

We wanted a quick result, because we knew it would take way too long to get a decent price in this current market.

 

[priscilla]

Well congratulations on the sale I am glad it worked out well for you

 

[Andrew_A]

Interesting thread, it's difficult to make any rules as there are always plenty of exceptions but I will throw in a few points based on what I see every week over a decent sample size of properties.

* The best agents usually are quite reluctant to accept an open listing, I wouldn't sell one of my properties this way unless I had some compelling reason. It's almost a self selection mechanism, prepared to discount your rate or accept an open listing = I probably don't want to use you.
* Want a quick sale? Look at your price, when you are talking months on the market especially.
* For sale by owner with cut price help to get on the search portals... what a mess.. Great in theory but so many manage to stuff it up somehow.
* For sale by discount agent, better than the last point but similar to the first point.