It’s time for a frank discussion on the “sharing strategy” that many estate agents use in the Helderberg area. The question that needs to be answered is: Is it really good for the seller?
Every property seller wants to sell for the maximum the market will pay – and they’re entitled to that. The only condition under which a buyer will pay their maximum for a property is when they are competing against someone else for it, and they have a fear of loss. Without this competition a buyer will try to see how much lower they can push the seller.
When a seller gives an agent a sole mandate to sell their property they expect the agent to get them the highest price the market will pay. For an agent to do this, they need to market the property really well so that all buyers looking for such a property will enquire on it, view it, and then hopefully make an offer. To achieve the best offers the marketing needs to be really strong to create buyer competition.
Unfortunately for estate agents, strong marketing costs money – money that most agencies would prefer not to pay. So, instead of doing what they should do for their seller, they spend very little on marketing and very quickly “open up” the listing to other agents, hoping that these other agents will bring buyers through. This strategy does result in buyer viewings – where a competitor agency brings a buyer through a property under sole mandate with another company. But is this good for the seller?
No, it’s not. This is because the buyer agent wants to secure the property for their buyer at the lowest price, and acts as a hindrance to the listing agent negotiating with the buyer. The listing agent will also not know what the buyers’ maximum offer would be, as he has to work through the buyer agent.
The better strategy for a seller is when their mandate agent does invest in decent marketing and the buyers enquire directly with the listing agent. The listing agent will know what interest there is, can get the buyers to compete against each other, which will result in the best price for the seller. The facts prove this.
With strong marketing there is no need to “share” a listing. Buyers follow houses – and so they will enquire of the listing agent. The threat that so-called “buyer agents” make that they won’t bring their buyers through is nonsense – as no agent “owns” a buyer. Whoever has the listing will get the enquiry, as long as they market properly – and therein lies the key.
Sadly for those agents who have a weak value offering, can’t market properties well, and can’t secure sole mandates, this means that they are excluded from bringing buyers through other agents’ listings. They moan and squeal, post anonymous blog articles, and say it’s bad for sellers.
But they are mistaken. Statistics prove that when a sole mandate agent markets a property well and works directly with the buyer a property sells much faster and for more money. And isn’t that what every seller wants?
Principal of Harcourts Platinum, and Director of Harcourts South Africa
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