When was the last time you saw a residential property listing being marketed by multiple real estate agencies?
That’s right – it almost never happens.
And yet in commercial property, open listings – with more than one agency marketing the same property - are far more commonplace.
But there are some compelling reasons why listing a property exclusively with one agency delivers far more bang for a vendor or landlord’s buck, and a better overall result, than having two or more agencies on the job.
AS THE VENDOR, YOU’RE THE PRIORITY
As a vendor or landlord, your relationship with your agent is critical to the success of your sales or leasing campaign.
You want them in your corner from start to finish, and listing exclusively gives you greater certainty that your agent will be pushing hard to get you a great result.
CBRE Advisory and Transation Services, Office Leasing director Nick Selbie says that because many commercial agencies are commission-based, accepting an open listing means they may not give the campaign their full attention, for fear of receiving no payment if the other agency sells or leases the property first.
“At the end of the day we’re a fee-based revenue business, and by having an exclusive listing or appointment we’re a fair bit more secure in the fact that if we do our job we’re going to be remunerated accordingly,” Selbie says.
“Having that security, it enables us to invest a lot more time and resources into a project, because we know it’s going to return.”
Property expert Dan Spencer agrees, suggesting vendors often receive far better service if they list exclusively.
“What agents tend to do is that when they have an exclusive, all of the work they do in and around that campaign is usually a step up from what it would be for an open list,” he says.
“What that means is getting them to ring their database; getting them to go that next mile. No one will put that effort in unless they can control the payment of those efforts. If you’re exclusive you can go and put in 20 hours of work and you know you’re going to get paid for it, whereas with an open listing you can put in 20 hours of work and someone else comes in and sells it for a dollar more.”
PRESENTATION AND PRICING
The way a property is presented to the market invariably impacts a campaign’s success, and two agencies with differing standards or opinions on how a listing should be positioned, from both aesthetic and price standpoints, can be a campaign killer.
Selbie cites a major office building in Surfers Paradise that was in receivership and 70% vacant for two years, despite being open listed with multiple agencies.
“A new owner purchased and appointed us on an exclusive basis and after a couple of years we’re 99% occupied, on the back of a refurbishment program as well,” he says.
“The main benefit was that it provided one consistent message, one point of contact, there was a clear message to the market about not only the new ownership structure, but the new commercial terms moving forward and the program of refurbishment and upgrades.”
MORE EFFECTIVE MARKETING
A great marketing campaign can be the difference between a good result, a fantastic result or no result at all.
And that means having marketing that not only sings to prospective buyers and tenants, but is also consistent in its messaging.
Spencer says ensuring consistent quality and a steady point of contact can be telling components for a campaign.
“Imagine trying to sail a ship with 10 different captains. You’re really not going to decide on the direction you’re going, you’re not going to decide on the timing, and you’ll end up with a poorer outcome than what you first sought,” he says.
With more people using online everyday, having a streamlined and efficient online advertising presence is crucial, and is far more likely to occur under one agency than many.
DISCOURAGE BUYERS SHOPPING AROUND
If more than one agency is listed for a property, there’s nothing to stop a prospective buyer or tenant contacting all of the agencies and trying to drum up the best deal.
And while the agents are technically working the vendor, if they’re engaged on a commission basis only the agency that secures a deal will be paid, which can play into a buyer or tenant’s hands.
“Particularly in the leasing space, the tenant will shop down price,” Spencer says.
“They’ll go for the commercial agent who seems to be the most negotiable, and will shop the price down in early discussions to see who they think is a better negotiator in being able to push the price down.”