There are a number of different Agency Agreements that you may choose from. The most commonly used agreements include: -

Exclusive Agreement
This is the most common form of agreement, and is preferred by most agents. Under this type of agreement the agent has exclusive rights to market and sell your property – If a sale is made on the property, regardless of how the buyer was introduced; the agent is entitled to their commission (even if you decide to sell your home to a personal friend, family member, etc.).

Entering into an exclusive agreement is a sign of faith from the vendor. The agent knows that they have a defined period (as set out in the agreement) to complete the sale, and, as long as the sale is made, there is no risk that their effort and costs will go unrewarded.

The upside for you, as the vendor, is that they know that the agent will be highly motivated to sell your property – both parties can cement their relationship, knowing that they are working together to maximise the sales price.

Sole Agency Agreement
This type of agreement is similar to an Exclusive Agreement, however it allows the vendor to introduce their own buyer. If the vendor finds and sells to their own buyer, then the agent fee is not payable.

Open Listing Agreement
An open listing agreement allows multiple agents to market a property. With this type of agreement, the vendor retains the right to sell the property privately without paying any fees. Whoever introduces the buyer and sells the property will be entitled to the full commission.

The upside for this type of agreement is that the vendor has multiple parties working on the sale of the property. Each of the agents will (or should) contact their buyer-network, and will try to sell the property ahead of the competing agents. Herein lies the problem – An agent may not necessarily fight as hard for top-price, as they know that another agent may sell the property before them (in which case they receive no commission). Agents will also be less inclined to spend their own advertising dollars on an open listing, as they have no guarantee that they will receive an income for their efforts.

Quite often this type of agreement is used if an agent has failed to sell the property under an exclusive agreement and the vendor wants to introduce another agent, whilst retaining the original agent.

Multi-Listing Agreement
A Multiple listing agreement is used when a listing agent shares the listing with other agents that are ‘members’ of a multiple listing network. In some cases an agent may have pre-agreed relationships with other agents – the listing agent has control over inspections and negotiations, but will allow other agents to market the property. When a sale is made, the fee is shared between the listing agent and the selling agent (if the listing agent introduces the buyer, then they get the full commission, if another agent introduces the buyer, then they will get a ‘selling fee’. In either case, the cost to the vendor is the same.

Conjunction Agreement
This is very similar to a Multi-listing agreement – An agent may engage other agents (via a Conjunction) – This is usually an ad-hoc agreement if another agent has advised that they have, or can source, a likely buyer. Again if another agent introduces the buyer, then they will get a ‘selling fee’. In either case, the cost to the vendor is the same.

Warning: You need to be very clear about the type of your contract you are entering into. If you have signed an exclusive agreement, and you engaged another agent to act on your behalf, you may be liable to two commissions. For example, if the agent “B” introduces a buyer, they will be entitled to a commission. If, at the same time, you have an exclusive agreement with Agent “A”, then they will also be entitled to a commission. Failure to respect the contract could end up doubling your costs.