Multi-listing, the practice of the ‘buddying-up’ agents, under a sole-mandated agent, may be yet another solution for buyers and sellers of residential properties.
In a northern Johannesburg suburb some weeks ago, a show day of a different sort was held, and not one potential buyer was invited. Instead it was a closed gathering of local agents, all from respected estate agency groups and there to view the property at the same time, with an intent to market it to their own buyer pools.
The show day host was not the seller; instead it was an appointed sole-mandated agent practicing what is considered an accepted method of marketing a property: multi-listing. It does however beg the question, how does multi-listing serve in the sellers’, and for that matter the buyers’ and sole agents’, best interest?
Pro’s and con’s
Herschel Jawitz, CEO of Jawitz Properties explains that multi-listing is a common practice in the USA, but in South Africa the closed listing method is more popular: “that being when an exclusive mandate is provided to a single agent who can introduce buyers to properties and conclude deals on behalf of the sellers and the buyers. There are pro’s and con’s to both systems depending on whether you are the seller, buyer, or agent.
“From the seller’s perspective, multi-listing has the potential advantage of more activity and a quicker opportunity to achieve a sale, however ‘quicker’ does not always mean a higher or better offer.” Jawitz’ point is that that with multiple agents having access to a property, an agent’s focus may be on quantity over quality in terms of a sale, and he says “agents may also not have the opportunity to really work with both buyer and seller to conclude the best possible deal.”
But in the current tough economic environment – particularly when sellers become frustrated at not being able to sell their home within the timeframe they expect and this despite the best efforts by an agent or agencies – some properties just don’t draw a big enough pool of serious buyers. That pool of buyers similarly becomes frustrated at having to stretch themselves across any number of sole-mandated agents, within a specific area.
“Multi-listing gives buyers the advantage of being able to work with one agent, within a multi-listing area, who has access to most of the properties listed,” says Jawitz, “which in turn enables the agent and buyer to build a good relationship based on the buyer’s needs.”
From the sole-mandated agent’s perspective, a portion of the commission of a house sale, whether the deal has been concluded by that agent or one from another property company, is guaranteed.
Wakefields Real Estate is firmly behind multi-listing and, says its CEO Myles Wakefield, is a practice it has used for decades. “We always present this option at some stage to our sellers, and it has proven itself to be an effective part of the sales process. Our sellers certainly appreciate it and given that our role and goal is to sell their property, we’d rather sell on a split commission basis than not at all.”
The split commission that Wakefields uses varies between 70/30 or 50/50, depending on a range of circumstances, but this is not a concern for the buyer, who is generally only required to give approval to the multi-listing process.
How multi-listing works
Wakefield outlines the modus operandi that his business uses. “First we ask the seller whether he/she is comfortable with our multi-listing his property on the understanding that as the listing agency, we will be managing the sales process. The seller is also assured that our listing agent is the only person with whom the seller will be communicating, other than when an offer is presented.”
Once a seller agrees, affiliated multi-listing agencies are invited to a viewing, usually a week day between 10-12h00, to present them with all the information required to sell the house to potential buyers.
“If an offer is made on behalf of a seller by another multi-listing affiliate agent, we do not insist that our listing sole agent be present when presenting the offer. That agent knows his/her buyer better than anybody else, and is therefore best placed to negotiate effectively to everyone’s satisfaction.”
There are occasions when the seller may during this process call Wakefields as the sole agent, to ask for advice, which is given willingly.
Berry Everitt, CEO of the Chas Everitt International property group, is not generally in favour of the practice because his company does not believe this is in the best interests of clients. “We do have associations with other agencies and are not averse to them referring a buyer to us or to sharing commission with them if there is value in it for our client, but we always remain in control of the transaction.
“As a rule, however, we find that with our extensive local and global marketing referral/relocation footprints and the internal buyer and seller cross-matching by our dedicated sales teams, we can easily pair our listings to buyer leads.”
Private Property believes that both closed listings and multi-listings have merit in the current market, and indeed Chas Everitt has built a strong reputation for its sole-mandate structure and resulting sales. That it, and other agencies do buddy up so to speak, says volumes about this industry that is considered a bar of measure that reflects the economic status of the country.
The fact that the sector has remained resilient up to this point is remarkable, and as South Africa enters its second recession in two years, confirmed by Statistics SA, the determination by agents to sell a property is heightened. If that means allowing another agent to sell through multi-listing, so be it because, as Wakefield says: “Sold is sold, and no matter how you facilitated a sale, there is a happy client at the end of the day.”