Should you multi-list?
Multi-listing, the process by which agents share their mandated properties on a shared platform with agents from other agencies, has become synonymous with complacency in certain areas, where agency service delivery is often very poor.
Barak Geffen, Executive Director of Sothebys International Realty South Africa says: "Agencies that use whats known as the 'farming' methodology instead, where agents are limited to one area of focus and do not share properties, have up to 500 percent more success nationally when it comes to achieving the best price within the shortest time.
"A seller might think that having five agents work on their property would result in five times the exposure, however, as the seller has not committed to a sole mandate, none of the agents are committed to selling the property. Only the least competent and ineffective agents would be happy to rush to apply effort for lack of a reward, hoping that their win-the-lottery methodology could secure enough income to pay the rent.
Multi-listing theoretically opens the property up to more buyers, but in practice mandated agents will often sit back and wait for buyers to come in from other agencies for which they generally split the commission 50/50.
The effort required to secure a sellers trust by way of a sole and exclusive mandate and thereafter deliver a comprehensive and focused marketing campaign, with carefully constructed, expensive advertising, is far greater than the effort required to secure a handful of buyers through poorly focused marketing initiatives whilst waiting around in the office for the right buyer to come along.
Geffen says there is little incentive to actively market the property if it is not the agents sole responsibility.
"Attorneys, accountants and doctors get paid for their effort and time, regardless of whether they deliver. If these industries operated similar to real estate, would it be rational to think that the most competent doctors would apply effort if they stood to gain no reward? They too would only work under sole mandate on an exclusive basis. Which doctors would work on a shared basis?"
Awarding a sole mandate to one dedicated agent empowers that agent to create a platform for competition between buyers. However, multi-listing on an open mandated property often results in agents prompting buyers to submit lower offers, simply to ensure that they are the first to secure an offer for the seller. Informed buyers may therefore make use of multiple agents to bid the price down.
Many sellers also dont realise that appointing one agent means one discreet For Sale sign outside your home, whereas multiple signs are normally indicative of discounted or distressed selling conditions in the eyes of the buyer which have the capacity to significantly alter the perception of value.
The success of focused marketing can best be seen in the areas of Constantia and Clifton in Cape Town and in areas like Sandhurst, Hyde Park, Morningside and Houghton in Johannesburg. Here top agents have typically worked for years generating gross turnovers of between R100R200 million per year, where agents in multi-listed area are lucky if they generate a fifth of this.
Article By: Carrie Holland - http://iafrica.com