Exclusive Agency Agreement Gives Real Estate Seller Peace of Mind
Real estate sellers should not fear exclusive representation agreements; quite the opposite: those who have no written agreement with a real estate agent have reason to worry. With an exclusive representation agreement, the real estate agent commits to using all available opportunities to market the property and provide the client with regular feedback.
The term "exclusive representation" sounds frightening to many. There is fear that by binding oneself to one real estate company and agent, one's options are limited. In reality, the situation is the opposite: an exclusive representation agreement expands the possibilities of finding a buyer for the property quickly and achieving the desired price for one's assets. How so?
First, a real estate agent who has signed an exclusive representation agreement invests one hundred percent in selling the property. They conduct a thorough market analysis, assess the property together with a professional appraiser, and draw up a marketing and sales plan. They guide buyers to banks where they can get the most favorable loan agreement. Behind the agent stands the entire company with its marketing resources. Additionally, they order property photos, posters, social media boosts, flyers for direct mailing, and so on. The agent also commits by written agreement to present the sales offer to all real estate agents operating in Estonia. In the real estate agents' cooperation forum, which our clients cannot access, there are over a thousand agents. Often, a buyer comes from among the clients of another agent, and frequently there are multiple interested parties, which gives the seller choice. It is not uncommon for interested parties to even start bidding up the price.
Second, with a written agreement, the real estate agent commits to providing the client with regular feedback. The agent records all of their activities in a computer program: presentations, client days, Facebook boosts—that is, paid promoted posts, social media advertisements, ordered photos, flyers, property catalog entries. The program compiles this information, adds to it all property viewings on real estate portals, creates a client report, and sends it to the client's email address once a week. This way, the client has a complete overview of how the agent is working on their behalf.
Third, an exclusive representation agreement with a reputable real estate company and professional agent guarantees the best service. We all know that time is money. It happens that a small agent from a small firm asking for a small commission posts a sales offer and calls the seller three months later with a suggestion to lower the price. Because if the commission is very small, it does not motivate the agent to invest much time in selling the property. In such cases, the agent pressures the seller to lower the price upon the arrival of the first interested party in order to close the deal quickly.
If the agent does not make an effort to ensure the best possible price for the real estate seller and as many interested parties as possible, then a small commission does not mean savings for the seller, but rather income that is smaller than hoped for.
The smaller and less known the real estate company, the more cautious clients should be. There are firms whose contract terms are frightening even to us when reading them. Large and well-known companies cannot risk their name and reputation. Usually, an exclusive representation agreement is concluded for a fixed term, considering, for example, a 4–5 month sales period for an apartment in Tallinn and Harjumaa. If the client is not satisfied with the service, they can terminate the agreement after that period and choose a new partner.
Fourth, an exclusive representation agreement also provides peace of mind to the agent. A written agreement ensures that if the agent takes marketing and sales upon themselves, no one else is dealing with selling the property at the same time. For cases where the owner finds a buyer for their real estate independently, reaching them regardless of our marketing channels, we have stated in the agreement that commission need only be paid at 50%. Usually, however, it happens that an acquaintance or even a neighbor has learned about the apartment for sale precisely thanks to our marketing. The agent has done the work, purchased internet advertising, paid real estate portals, paid for flyer design, printing, and distribution, and thus reached a potential buyer. The exclusive representation agreement gives them the assurance that even if the buyer turns out to be, for example, the seller's neighbor or acquaintance, they will not go without payment for work done.
Article source: Arco Vara
