Estate Agent Today

The Case for Shorter Sole Agency

The RAT (Rawlings’ Agency Tip)

The case for shorter sole agency

Before I work with agents during a training session I invite the agency principal to complete a pretty comprehensive Agency Analysis Worksheet. (Please email me if you would like a free copy of this exercise, as even completing it can in itself prompt you to consider hidden aspects of your agency business.

One of the questions in the analysis is simply “How long is your period of sole agency?” The responses I receive tend to range from zero to twenty six weeks. Guess which one I recommend? Zero – for several reasons:

Firstly, what is the benefit to the client of a long period of sole agency? Nothing! And if you believe your own spin about a long period of sole agency justifying enhanced advertising, forget it. Advertising (on line at least) is cheap and you would probably advertise the same even if you had a minimal sole agency period.

From the client’s perspective why would anyone in their right mind agree to bind themselves into a long period of sole agency? What if you stopped bringing buyers round or never contacted the client? They would be pretty miffed, but would be compelled to keep you on because they signed a contract with you.

Do you really want such relationships with people who do business with you because they HAVE to? What does that do for your reputation? And what does it do for their trust in you when it comes to a price reduction (sorry a “repositioning in the market”) or negotiating a low offer?

Additionally, especially in this market, many agents believe that a long sole agency will protect them against slower sales. If this is you, then I suspect that you may well be finding that the end of a fixed sole agency period actually becomes a formal prompt for them to switch agents (who will then reduce the price and earn the commission you should have made!)

Don’t get me wrong…I love sole agency (and would only take a multiple agency as a last resort - more on that next week). But the issue is the length of the contract. I wonder how many of you who have a long sole agency period have failed to get an instruction because one of your competitors used it against you. They would quite rightly have used arguments such as the following: “Mr Seller, why would you want to bind yourself for so long to an agent who has so little confidence in their own abilities?” “Aren’t they putting their needs ahead of yours?” “A lot of the price reductions you are currently seeing in the market are on properties where an agent took it on within a long sole agency period, where they have plenty of time within which to convince the seller to drop their price.”

And the killer line is - “We believe that if ever you are unhappy with our service, you should have the right to fire us at any time! All we ask is that you give us two weeks notice of termination. Does that make sense to you Mrs Seller?”

See the point? A short sole agency is actually an enduring one, within which price reductions can be advised as a matter of course if appropriate. It also forces you to look after your clients! And from a marketing perspective, if you can advertise “no long tie-in period of sole agency” I wonder how many more instructions you’ll attract away from your competitors? Most of the agents I know who have switched ot this technique have never looked back !