Buyers Are Not Loyal to Agents

Home sellers need to factor in that buyers are not loyal to agents, and that all agents are in essence tapping into the same pool of buyers. In 2024 buyers follow properties, not agents and sellers would do well to remember this. Having an open listing with multiple agents won’t necessarily mean accessing more potential buyers - but rather the same buyers who will pit agent against agent to secure the best possible price - all at your expense.

Sending All The Wrong Signals

When multiple agents have been engaged to sell one property, invariably each agent will use a different photographer and market the property differently. This sends out all the wrong messages to the buying market. As well as confusing the buyers, it creates the impression that the seller is desperate and therefore will be likely to accept any lowball offer. Statistically listing your property with multiple agents will more than likely always lower the price that the market will be willing to pay for the property.

A Tale Of Two Commissions

The dangers are real! Could you really be liable for a double commission payment? Buyers may have seen the property with one agent, but then speak to another agent that tell's them they may be able to secure it for them at a better price. Buyers will then naturally make an offer with the agent who has made this claim. However sellers should be aware that the agent who introduced the buyer to the property originally has just as much right to claim full commission on the sale of the property as the agent who took the offer that was accepted by the seller. Therefore the seller could be left in a very real situation where they are legally obliged to pay two agents full commission on the sale of their property, which can be exceptionally costly and means the seller walks away from the sale with less.

A Legal Can Of Worms!

Many home sellers are not always properly informed about the binding nature of accepting an offer to purchase, and don’t understand that they have signed a legally-binding document. This can open the seller up to legal action in the case where multiple agents are marketing the property should the seller accept two offers from two different agents. Can this really happen?

If a seller accepts an offer on their property from one agent that has conditions like perhaps "subject to finance" or "subject to a building and pest inspection" or "subject to the sale of the purchaser's property". The contract should stipulate a clear time frame in which the these conditions need to be met.

Another agent then comes in with a cash offer which is far more appealing to the seller as they don’t have to wait for any conditions to be met. They accept and sign the cash contract thinking it means the first contract falls away. This is not the case.

The first offer always takes precedence. The agent with whom the seller signed the second contract to purchase can sue the seller for the full commission should the suspensive conditions on the first offer be met. Furthermore, in this case the purchaser who made the second offer could also have claims on the seller for creating false expectations.

It is the seller’s obligation to make sure they have a copy of the first contract they signed in order to determine the terms and conditions, and to be upfront with all the agents marketing the home about any offers they have accepted or rejected as soon as it happens.

Exclusive listing agreements really do work best for selling a home at a good price in a reasonable amount of time, and get rid of the hassle of dealing with multiple different agents and opening the seller up to all sorts of legal risks.