Two more “For Sale” boards have crashed your open house. The cherry on top? The signage on these boards differs from your brokerage. The only reasonable explanation is that your seller is working with multiple real estate agents.
How many real estate agents can a seller work with? As many as the seller deems necessary. No law or regulation prohibits sellers from partnering with several real estate agents on the same deal. However, it is a practice often considered unethical.
In this article, we’ll discuss why there’s no limit on how many real estate agents a seller can work with and what it could mean for your property sale. Reading this will help you understand the dynamics of agent and client arrangements and aid you with knowledge for future dealings.
Implications of Working with Multiple Agents
The fact of the matter is that there is no law, state regulation, or ordinance that restricts a seller or buyer from partnering with more than one agent. I can see why a seller would consider this option.
A team of real estate agents on one deal translates to faster sales and possibly better terms. Though it does warrant celebration from a client, it is a no-go transaction for real estate agents.
No Pay and Misappropriated Resources
If you join a non-exclusive deal, working with fellow agents guarantees two outcomes: no pay and misused resources.
Regardless of the price tag associated with the home, if another agent closes the deal, you will unfortunately not get a cut. The commission will go to the agent who closed the sale, irrespective of your efforts.
All those open houses, the listing, and advertising would be in vain.
The second outcome? The energy, strength, and time you poured into the deal could have been better used elsewhere, perhaps in an exclusive contract.
One of the worst parts of being a real estate agent is that you have to foot your own expenses. The costs associated with operations often fall solely on you. If you misappropriate resources into a deal that does not promise you a commission once it closes, you may have wasted your resources’ milage.
Granted, it will not be a complete waste if you consider the possible exposure the deal may afford you. But does the exposure qualify the expenses?
At the end of the day, if you participate in a non-exclusive deal, you run the risk of working for free.
Breaks the Code of Conduct
Real estate has a code of conduct, a way we prefer to operate, if you will. One of the rules in this code of conduct is that an agent may never interfere with another agent’s deals, clients, or transactions.
Partnering with or pursuing a client in a contract with another agent is unethical.
The National Association of Realtors has this rule in its code of conduct. The NAR restricts its agents from approaching or even contacting a client associated with a different brokerage or agent with an intention to offer services.
Risks and Drawbacks of Participating in a Multiple Agent Sale
Participating alongside other real estate agents in a deal has several downsides that are better avoided. Let’s explore a few:
Confusion and Miscommunication
Working with several agents on one deal can result in confusion. Sure, you are all chasing the same goal, but with different experiences, you will be coming from different angles.
Suppose there are three agents in one deal. It would mean three different agents communicating with one seller. The seller’s progress and conversations with one agent may not be shared with the other agents, causing confusion and misunderstanding.
Reduced Loyalty and Commitment
Unlike exclusive arrangements, non-exclusive listings allow sellers to pivot among agents. This opens the door to seller disloyalty.
But it doesn’t stop with sellers. The reduced loyalty from sellers diffuses individual accountability and motivation levels among agents.
How to Handle Multiple Real Estate Agent Deals
Finding yourself in a real estate transaction with multiple participating agents often spells trouble. While rarely ideal, these scenarios do occasionally arise. Should you land in one, here’s how you can make the best of a tricky situation:
- Only join non-exclusive deals when absolutely necessary, as in the associated publicity guarantees long-term client relationships. Otherwise, too many cooks in the kitchen waste your efforts.
- If a seller does engage multiple agents, have an open conversation on expectations upfront. To minimize confusion, align on preferred communication channels, individual roles, and transparency protocols.
- While you obviously aim to showcase your superior skills to earn the client’s trust, you also view it as an opportunity for industry growth. Study how experienced peers pitch or, negotiate and assimilate best practices.
- Focus on providing exemplary service to give the seller reasons to lean your way for later deals. Even if you don’t close the deal, choose to immerse yourself in specialty sectors or clients you rarely encounter to expand your wisdom.
Ideally, though, help clients understand why exclusively appointing one trusted agent best protects their interests. Diplomacy can ease transitions if deals grow crowded.
Exclusivity Is the Cleanest Course
Working with multiple real estate agents may sound like a good idea on the surface. More people working means faster results, right? However, this approach comes with its own set of risks and drawbacks. My advice is to flee from non-exclusive transactions. If the seller cannot commit, get out of there.
If you find yourself involved in such a deal, here are some action steps you can take:
1. Only participate when necessary: chase non-exclusive deals if there is an opportunity for significant learning and growth.
2. Communicate openly: Discuss expectations upfront to minimize confusion down the line.
3. Focus on providing superior service: Even if you don’t close the deal, use this as an opportunity to expand your knowledge base.
Do these scenarios resonate with your experiences? Or perhaps they’re situations you’d rather avoid altogether? Either way, we’d love to hear about it. Share your thoughts below!