| Q1: |
What
are the types of agency arrangements? |
|
There are 3 main types of agency arrangements:
a) Sole agency
b) Exclusive agency
c) Multiple agency
|
| Q2: |
What
does it mean to appoint an agent under sole agency and exclusive agency?
|
|
In both cases, it means that you have
appointed only one agent to sell your property. Only he/she can act
for you; no other agent can do so. However, if you (the owner) manage
to find your own buyer, you do not need to pay any commission to the
agent under the sole agency terms. Whereas in the exclusive agency,
you will have to pay the agent his commission even if you sell the property
yourself. However, you will need to reimburse the agent for marketing
expenses under the sole agency arrangement.
|
| Q3:
|
What
is a Multiple Agency? |
|
A multiple agency is where
more than one agent is appointed to market your independently, and only
the agent that sells the property gets the commission.
|
| Q4:
|
What are some advantages of employing an agent under sole agency/exclusive
agency as opposed to multiple agency? |
|
Firstly, because only one agent is marketing
your property, it reduces the possibility for potential buyers to be
quoted different prices/information from different agents quoting different
prices for the same property. Secondly, because the agent would not
have to fear that another agent would be ahead of him to sell your property,
he would tend to be more committed to sell your property at the highest
possible price.
|
| Q5: |
What
are the possible disadvantages in engaging a sole agency when selling
my property? |
|
Some owners believe that sole agency
arrangement would tend to limit the pool of potential buyers, hence
resulting to a longer marketing period, or a lower price fetched. Generally,
there are no hard and fast rules as to the best agency arrangement.
You can always adopt for a sole/exclusive agency method of selling for
3 months and see how you feel about the arrangement. If you are not
comfortable about the arrangement, you can always terminate the agency
arrangement in writing.
|
| Q6: |
What
is the "standard" amount of commission that I should pay my agent? |
|
The Institute of Estate Agents' recommended
2% of the sale price for private properties. The actual amount is usually
negotiated between the agent and the seller.
|
| Q7: |
Am
I solely responsible for the payment of the agent's commission or does
the purchaser also pay for his commission? |
|
The Institute of Estate Agents guide
states that an agent's commission is usually only payable by the seller
for private properties. However, some agents may ask for commission
from both the buyer and the seller, though such practices are discouraged.
|
