When should you appoint an exclusive property agent?

Make no mistake, going exclusive with a particular property agent can be a gamble. If you get a good agent, you’ll get a quick sale at a good price. Get a bad agent, and several months down the road you’ll feel like you’re stuck in a bad marriage you can’t get yourself out of.

Here are some factors to consider before taking the relationship to a whole new exclusive level.

Exclusive versus multiple property agencies: What’s the difference?

When you have an exclusive agreement with a property agent, you agree to buy, sell or rent your property only through that agent. As an industry standard, such exclusivity agreements are valid for up to three months.

During those three months, you must pay the commission to the appointed agent, even if your house is bought, sold or rented through other means. For example, say you have an exclusive agreement with a property agent, but end up finding a buyer yourself. You would still have to pay the commission.

In addition, for up to three months after the validity period, you still need to pay the commission if you make a transaction initiated by the agent.

For instance, two months after your exclusive agreement ends, you sell your house. The buyer was someone introduced by your exclusive agent. You would still need to pay the commission to that agent.

For non-exclusive agreements, you can engage multiple agents to buy, sell or rent your property. The commission simply goes to the agent who manages to close the deal for you.

What should be included in the agreement? 

Whether you choose to sign an exclusive agreement or a non-exclusive one, it should contain the following details:

• Details of the duties of the property agency and agent
• Potential conflict of interest
• Property agent commission amount
• Situations in which you have to pay the commission

Signing such an agreement can help protect you (as a buyer or seller, or as a landlord or a tenant) and the property agent’s interest.

You may also want to sign one that’s prescribed by the Council of Estate Agencies (CEA). Doing so gives you the option to approach CEA for help in resolving any disputes with your property agent.

So when should you bother giving an exclusive agreement?

1. The agent agrees to a higher commitment of service

See if the agent will voluntarily sign a commitment of service document. This can be included as one of the documents in your exclusive agreement. Typically, this means the agent agrees to meet certain standards, such as:

• Placing a certain number listings, on places like 99.co.
• Conducting a certain number of viewings every week or every month
• Creating marketing materials, via the use of professional photography or videography
• Providing an analysis of the area, such as a rundown on recent prices and rental rates
• Staging the property for viewings

In effect, the agent is agreeing to a certain amount of marketing spend. The agent pays out of pocket for most of these. The idea is that an exclusive agent will expend more resources to help you, as opposed to non-exclusive agents.

2. If you want above-market rates, an exclusive agreement can help

Sometimes, you don’t want to rent at the average rate for the area. Or you may want to sell your house for S$1,400 per square foot, even if the going rate is S$1,350. Whatever the case, you’re looking to get more than the market rate.

This requires a higher level of selling – your agent will have to take better pictures, post more frequent listings, network to find the right clients, make more TikToks to market your property, etc.

Most non-exclusive agents are not going to expend the same amount of effort. They might prefer to focus on easier sales, and leave yours on the back burner.

3. Use an exclusive agreement to build a long-term relationship

How long will you be in the property scene? If you’re a homeowner who buys or sells maybe two or three times in your life, then a long-term relationship may not be needed. But if you’re a landlord who needs someone to constantly find tenants, then you may want to focus on building a long-term relationship.

Once you’ve found an effective agent, you may want to keep them on an exclusive agreement. This will allow them to focus more on your properties, rather than those of other landlords. And as they work with you over the long term, they’ll have a good understanding of your expectations; there’s no need to waste time briefing other agents on what sort of tenants you want, or explaining your intentions.

4. An exclusive agent usually means a quicker sale

If you have multiple agents posting multiple listings, that means a quicker sale, right?

Not really. In fact, it can mean the direct opposite.

When you have multiple agents selling your property, they don’t know if they’ll be the ones to close it. They may waste hours conducting viewings of your house, only to find that another agent has closed the deal.

As there’s no guarantee that marketing your property will pay off, you’ll become a lower priority. And it’s possible that every one of the agents you’re working with will think that way. Some sellers even find that, when they work with multiple agents, the number of weekly viewings actually decreases.

If you’re in a situation where you need to sell urgently, you’re better off getting an exclusive property agent. A single, well-incentivised agent is better than four or five agents who regard you as an afterthought.

5. You don’t want multiple, disparate listings to appear (sometimes on the same media)

If you engage multiple agents, there may be some overlap.

You might see your property appear multiple times on the same site or newspaper. The descriptions of the listing may also be disparate (e.g. one agent emphasises it’s next to a major mall, whereas another tries to suggest it’s peaceful; these two qualities don’t go together). Also, there may be a significant variation in the price, depending on how you communicated this to the agents.

Most landlords and sellers dislike this. And when potential buyers and tenants see multiple listings, it gives the impression of desperation. This encourages them to bargain for a lower price. Some will approach each of your agents, and try to push the price down in separate negotiations. Not only does this slow down the sales process, it can also lead to a price war.

Worse still, some might even view the multiple listings as fake listings, causing them to look at other properties instead of yours.

6. Finally, if you’re a first-timer, it’s advisable that you use an exclusive agreement

If it’s your first time selling or renting your house, it’s better to have an exclusive agreement with a property agent. This is because, as a first-timer, there’s a good chance you’ll make some mistakes.

For example, you may be late in getting the place furnished for your tenants, or you might make a mistake with the dates in the paperwork. An exclusive agent will devote more time to walk you through these issues and fix them for you.

Frequently asked questions

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