Exclusive Agreement
I know the benefits for a broker to get an exclusive but what benefits does the owner/landlords get when they give an exclusive to a broker?
[{"id": "f2dl6bk", "text": "In theory with an agreement, the broker is able to market the property with maximum exposure because he\u2019s protected. I could market it to my buyers, to every other agent\u2019s list of buyers within my own office, as well as other office\u2019s agents and their buyers. If you\u2019re not protected, the first person you market the buyer to, can just go right around you and cut you out of the deal.", "replies": [{"id": "f2dmdx7", "text": "Yeah its beneficial to a broker. What benefit to me, the owner/seller get out of it?", "replies": [{"id": "f2dq5is", "text": "No broker will market it for you without an exclusive agreement. So you\u2019re not really asking what good is the exclusive agreement, you\u2019re asking what good is the broker.", "replies": [], "depth": 3}, {"id": "f2dt07p", "text": "A good broker is so busy they don't need to take an open listing. There are brokers that will, but they are generally more desperate for business / not as good.", "replies": [], "depth": 3}, {"id": "f3oj6g9", "text": "Seems like you don\u2019t like or want to use a broker why not just do it yourself then?", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "f2dlccw", "text": "Motivation. They engage a broker who now knows they aren't potentially working for free.", "replies": [{"id": "f2dmg8h", "text": "Shouldn\u2019t you be motivated already, you already know how much commission you\u2019ll get if you do close it", "replies": [{"id": "f2dsosp", "text": "Let's say I decide to give your property the same treatment I give properties I actuslly have listed. I spend a day (or a researcher's day ie. my money) developing a targeted list of potential buyers, and then I spend another day calling 40 of them. Number 37 tells his brother about it, who calls you directly, and you sell him the property. Now I get nothing for my 2 days of work. That's a very, very low end estimation of the time I have involved in the deal, and it assumes you're scrupulous enough that if 37 calls you and mentions me, you're a good enough person to say \"well, I didn't have an exclusive, but that broker obviously did the work.\" You would be one of very, very few. \n\nWe (brokers) already work for free with all the deals that get screwed up by due diligence, attorneys, etc. Why would we line ourselves up to do more of that?", "replies": [], "depth": 3}, {"id": "f2dt68z", "text": "In an open listing, a broker has the potential to have put in many many hours of work, for free (paid at closing only), only to have their best potential buyer used as a stalking horse to set the price for a partner of the owner for example who will just pay slightly more than the best offer the broker can generate, leaving the broker without a commission for their efforts. Even in that case with an inside buyer known by the seller, the broker generates value by making them submit the highest market rate offer, higher than they otherwise would have.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "f2dle1h", "text": "Brokers will invest in marketing the property, creating the sales package. Also, a listing agreement allows a broker to run a formal sales process: marketing, multiple rounds of offers and negotiations that raise purchase prices, etc.", "replies": [{"id": "f2dmlfj", "text": "I can put it in the market by owner and get the same sales process, rounds of offers and etc. There\u2019s no difference and I can give the buyer a 6% discount", "replies": [{"id": "f2dn7tp", "text": "Ah, i see your question. The value a broker brings is really their network and their marketing. Brokers can get the property in front of a lot more buyers than a standard owner. The firm I was with had a buyer pool of 5,000+ qualified national buyers. This was in the US. On the deals I worked on none of the owners had that kind of reach. \n\nAlso, the professional marketing will increase sales price. If your paying 6% you\u2019re either paying way too much in commissions, or your deal size is low ($2m or less). Either way, a good broker will more than pay for themselves, and run the sale for you. The other thing to remember is the brokers send you off market opportunities first if you\u2019re regularly using them, so it\u2019s also about access to new deals.", "replies": [], "depth": 3}, {"id": "f2dswcz", "text": "Someone who does nothing but sell properties, all day every day, can expose it to more potential buyers, thus generating a higher sales price. This is especially true the more inefficient the market, such as specific product types or geographies.", "replies": [], "depth": 3}, {"id": "f31ol9b", "text": "&gt;I can put it in the market by owner and get the same sales process, rounds of offers and etc. There\u2019s no difference and I can give the buyer a 6% discount\n\nI mean no, you can't. But you've made up your mind.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "f2dnqz6", "text": "Because you are creating a market for the property. If I market the property to my top 10 qualified investors I may gather good offers. If that property is marketed to every other agents top 10 investors as well as mine,  the odds of a better offer increase. Different buyers have different criteria. The idea behind the exclusive is that the agent can shop the property to the most of amount of people (and is protected by the agreement) to net the seller the highest price.", "replies": [{"id": "f2doam6", "text": "You may get good offers but it\u2019s not guaranteed you\u2019ll even get one though.", "replies": [{"id": "f2drpyn", "text": "That\u2019s why there\u2019s a limited time period for listing and you as the owner are not required to accept a price you don\u2019t see as fit.", "replies": [], "depth": 3}, {"id": "f2dtbya", "text": "A good reason to ask about a potential broker's track record. If they can show you a ton of similar buildings that they have successfully sold recently, there is a high probability they can achieve the price they tell you your property is worth, generate offers from qualified buyers and advise you on which buyers are actually capable of closing, not just wasting your time.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "f2drkky", "text": "In my case, the owner is in Europe, he cannot rely on brokers he does not know. Till now I did a very good job representing him so it made sense to get an exclusive to represent him. I also gave him a discount on the broker's fee. I hope this answer helps you.", "replies": [], "depth": 1}, {"id": "f2dsf16", "text": "Bringing multiple offers to the table is the most tangible benefit, as the broker will encourage some healthy competition and it\u2019s in their best interest to bring you the highest price. \n\nAn exclusive agreement ensures the brokers interests are protected so they don\u2019t have to worry about working hard without a guarantee. Listing agreements also come with a time limit, so they are required to get you your price (which is your base + their commission) by marketing the property in that time.\n\nAnother benefit is access to market analytics and (if they are worth their salt) insights into market trends and behaviors on both a local and national (or even international) scale.\n\nUnless you want to spend enormous amounts of money on costar and/or a team of data scientists, you likely won\u2019t come to close to understanding the potential value of your property in regards to market cycle or highest/best use.\n\nYou\u2019d have to be an investor or developer that\u2019s incredibly well educated on real estate and hyper active in the market to compete with a good broker\u2019s understanding of your market value. Even if that\u2019s the case, most of said individuals I know hire brokers *anyways* because they have other things to do.\n\nThe last hidden benefit: time. Save yourself some time. If you know exactly what you want from your property and you are confident in your valuation, offer a broker less money to do the grunt work and market it as you see fit. I\u2019d take a reduced commission all day if my client knew what they were talking about and it was an easy sale.", "replies": [], "depth": 1}, {"id": "f2ee4r2", "text": "I know the benefits of going to a mechanic, but why dont I just save money, watch a youtube video and fix my engine itself?", "replies": [], "depth": 1}, {"id": "f2ef9k2", "text": "Confidentiality and fiduciary. With an exclusive, you\u2019re required to work in the interest of your client and withhold information you learn in the course of marketing the property.", "replies": [], "depth": 1}, {"id": "f2egqdd", "text": "This is a landlords perspective. \n\nI never sign an exclusive agreement with my agent especially as a vendor. The whole blah blah about marketing and network is nothing but red herrings. Here is why. The BUYERS AGENT is going to sell the property to the buyer, his/her client. This is because the buyer trusts his/her agent. The vendors agent is regarded as a \u201cpushy salesperson \u201c.  When they are one (exclusive), the agent is regarded suspiciously. With good reason, conflict of interest. \n\nAs a side note : I have never bought a property from an exclusive agent. \n\nAs a matter of fact, I always list any property  I sell with higher than normal buyers agent commission split. That will get you more action than any agents marketing or network.\n\nNote: I use broker and agent interchangeably.", "replies": [{"id": "f2eov1f", "text": "I wonder how much money you have left in the table from having fewer buyers who look at your properties. Most agents I know don\u2019t even work other people\u2019s deals. So you are really just shrinking your buyer pool.", "replies": [{"id": "f2f00bq", "text": "Wrong! \n\nNo one broker has a network as big as multiple buyers brokers combined. Simple. \n\nMic drop \ud83c\udfa4", "replies": [{"id": "f2f20ki", "text": "The firm I work for requires agents to send their listings to the other agents in the firm who have their own buyer lists. So yeah, I would say that having 1800 brokers who have their own buyers who know they are going to get 50% of a deal fee have more buyers than the 4 \u201cbuyer brokers\u201d you use. Buyer brokers. Lmao no one I know works with them because they add no value to a transaction, unless there is something wrong with the deal and they can just slam someone in.", "replies": [{"id": "f3eqtr9", "text": "I got so confused because this is the CRE group. I know buyer brokers are popular with single family residential. I don\u2019t know enough about &lt;$5MM commercial to know whether they\u2019re a thing in the Class C stuff as well but it\u2019s rare to see them in any big commercial transaction", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "f3w3y9z", "text": "Just list it yourself, see how you do. \n\nThen when you pull it because it hasn\u2019t moved make another post asking why.", "replies": [{"id": "f41fxr0", "text": "Right, that\u2019s how you win your exclusive pitch to Owners", "replies": [{"id": "f428pb0", "text": "Thing is I\u2019m not pitching anything.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}]