Sole Agency, Joint Sole Agency or Multi-Agency? Why Work With Both an Estate Agent and an Auction House?

Multi-Agency Property Sales

Multi-agency sales involve two agents or more, all working to sell the property. The agent who completes the sale is entitled to the commission, which can be higher because they have less certainty.

Benefits:

• Agents may be perceived as working harder to market and sell the property since they are in competition to earn a commission.
• Using multiple agents may result in wider exposure.

Disadvantages:

• Lack of exclusivity – With a multi-agency agreement, the property owner is not bound to work exclusively with any one agent. This means that agents may not invest as much time, effort, or resources into marketing the property, as they are aware that they are in competition with other agents.
• Potential inconsistency in marketing – When multiple agents are marketing the same property, there is a risk of inconsistency in branding, advertising, and pricing strategies.
• Limited agent commitment – Since agents are aware that they are competing with other agents, they may be less motivated to invest significant time and resources into the property.
  Difficulty in tracking and coordinating efforts – Coordinating activities and communication among multiple agents can be challenging. There is a risk of miscommunication, overlapping efforts, or missed opportunities.
• Potential conflicts of interest – In a multi-agency agreement, different agents may bring in potential buyers for the property. This can lead to potential conflicts of interest, as agents may prioritise their own buyers over others.

How Estate Agents and Property Auctioneers Work in Partnership

Some properties are ideally suited to sale at auction for a wide variety of reasons. Properties, for example – those that require repair or refurbishment, unique properties or those with rare features. Properties with a propensity for investment or re-development and land of all descriptions can achieve outstanding results at auction, where interested buyers with the capital to invest may bid competitively. If you’re interested in finding out whether your property is suitable for auction, read our guide here: How to sell a unique or unusual home or property. 

Other instances, as we’ve touched on above, are when a property is best marketed as a development project – something that developers, property investors and professional landlords often look for as a way to enhance their portfolio and return a capital appreciation profit.

If an estate agent, drawing on their local market knowledge, suspects a property will be difficult to sell or will be hard to market to the most appropriate buyer group, anticipating the sale to take longer than usual, they may recommend coordinating the sale with an auctioneer.

The aim is to get the best price for your property, using the wide-scale marketing campaign and access to a unique buyer pool available through an auctioneer to generate interest from a wide variety of interested parties.

Read our guide: should I use a property auction? 

Open bidding can work favourably, with transparent bids as opposed to sealed bids sometimes used in other sales methods. The additional advantage to the seller is that there is a high degree of certainty that the property will sell straight away, with funds released in as little as 20 days.

Benefits of Selling a Home Through an Auction House and Estate Agent

Most sellers working with an auctioneer and an estate agent have this route recommended, with the assurance that provided one bid is submitted at or above the reserve price, they will have exchanged contracts for the property when the auction ends meaning both the buyer and the seller have entered into a legally binding contract.. This is particularly helpful if you have an onward purchase to consider.

For estate agents, working with an experienced auction house is also advantageous:

• They can facilitate a speedy sale for their client, working with the auctioneer to help establish the property marketing information and seller pricing expectations.
• Land or property that may take longer or be more difficult to sell to alternative buyer demographics often sell very quickly, preventing client disappointment or frustration. Find out how long the auction process takes here: How long does it take to sell a property at auction?
• Auctions often achieve fantastic sale values, where high-interest properties and the auction environment mean bidders can continue submitting bids to secure the property over a competing buyer.
• Common issues in private treaty sales, such as one buyer dropping out of a chain, do not exist in property auction sales since every transaction is a cash purchase, and a legally binding agreement is made by the highest bidder.
• The commission is split on an equal 50/50 basis, meaning that the estate agent is likely to achieve a higher commission than if they were to be a sole agent.

For more information about how estate agents can work with auctioneers, read our article here. 

There are other benefits to sellers, particularly where they wish to set their own time frames, with the option of entering the property into the next available auction date – provided there is sufficient time for marketing.

Agents can refer a property to their selected auctioneer, with their client’s agreement, without delay ensuring the auction house can begin marketing the property and, in the vast majority of cases, achieve a profitable outcome in just a few weeks.

If you’re new to property auctions, find out how property auctions work here. 

If you’re looking to speak to an experienced auctioneer about working with your estate agent in a joint agency agreement, get in touch today. Let us know the details of your property and we’ll talk you through your options. Find out more about selling your property via auction here.