Selling a house: What are the advantages and disadvantages of mediation orders?

You want to sell a house in Tyrol and have already researched on the internet about selling a house with an estate agent. In the texts you read again and again about a "general brokerage contract" and "sole brokerage contracts". What are the advantages and disadvantages of each type of brokerage?

You may also be wondering whether you can sell your house without these agency orders. In this blog post you will find the answers.

General brokerage mandate increases supply reach

A general - also plain - brokerage contract means that you can commission several brokers with the sale at the same time. You also have the option of conducting an independent private sale.

The brokerage agreement can be terminated by both you and the brokers at any time and is valid for an indefinite period. So you do not have to renew the agreement after a few months.

If you contact several estate agents at the same time, they can advertise your offer on their websites. This allows you to reach more potential buyers. In addition, you can still look for potential buyers yourself and offer your house on real estate platforms.

You can find out which real estate platforms are particularly lucrative for houses in Tyrol and how to create an effective advertisement in our blog post "Haus richtig inserieren: How to get good offers quickly".

At first glance, the general brokerage contract seems to bring a quick and secure conclusion of the sale. After all, numerous interested parties see your house this way. However, there are two major disadvantages to this approach.

Disadvantages of the general brokerage mandate: Sceptical interested parties and passive brokers

Disadvantage 1: Estate agents only passively take care of the sale. The simple brokerage contract does not oblige the broker to actively broker your house.

For example, if an estate agent already has a few sole agency contracts from other sellers, he or she will put your request on the back burner. Why is that? Isn't every potential sale an opportunity for the broker?

The commitment to a general brokerage contract carries a high risk for the real estate agent. Advertising a house involves costs on the one hand and a great deal of time on the other. Only in case of success does the real estate agent receive the commission that pays for his expenses and invested time.

If many estate agents and the seller himself are now looking for interested parties, the chances of success for the individual estate agent are diminished. This can lead to many brokers considering your sale as a second priority.

Disadvantage 2: Your offer looks suspicious to potential buyers. Imagine you want to buy a house and you are browsing through several real estate platforms and estate agents' websites. The same house catches your eye again and again, but each time it is offered at different conditions. Would you be interested in this property?

If your house is often advertised, prospective buyers will question the seriousness of the offer, the estate agents and also the seller. Only in very few cases are you then still able to achieve your desired price when selling. Buyers push the price down by referring to cheaper offers from different estate agents.

Sole brokerage leads to quick sale

An exclusive agency agreement (AV) obliges the agent to actively promote the sale of your home. What does that mean? He must actively promote the house by advertising your offer, creating the exposé and visuals, creating online advertising or arranging viewings.

For the time being, he assumes all costs incurred at his own risk, and in the event of success, the broker is then paid the commission. This ensures for the seller that the broker acts professionally.

In contrast to a general brokerage commission, a sole brokerage commission is limited in time. In the case of a house sale, the commission is valid for a maximum of 6 months. Thus, the agent will aim for a quick sale.

Moreover, since his commission depends on the selling price, a reputable real estate agent will strive to achieve a profitable price for your home.

4 exclusive advantages of the sole agency contract 

In addition to the active brokerage of your property and the legal protection of both parties, a sole brokerage contract also brings other advantages:

Advantage 1: Bundled, professional communication with authorities
Obtaining information from authorities such as building offices is often a lengthy and complicated process. In some cases, knowledge of building law or building procedures is assumed or required for communication with the authorities. If you have commissioned an estate agent with the sale, he or she will take care of the official procedures and communication for you.

Advantage 2: Complete and uniform data
If the broker collects the required documents and data, he has the obligation to prepare them for you in a uniform and clear manner. So you don't have to fight your way through a forest of documents.

Advantage 3: No time pressure as a seller due to exclusivity.
Since you only entrust one estate agent with the sale, you do not have to decide on an offer quickly. Your estate agent ensures that the potential buyers' intentions to buy are serious and that they also have the financial means to buy. This increases the quality of the offers for sale.

Advantage 4: Increased demand thanks to broker cooperation
Even if you place a sole brokerage order, your broker can cooperate with others. Within the large network, brokers recommend properties of colleagues if they themselves do not have a suitable property in their portfolio for an enquiry. In this way, more interested parties are reached.

With a sole brokerage contract, you do not necessarily receive fewer potential buyers, but more serious offers. You also benefit from the expertise of an expert who actively supports you in the sale.

No brokerage means no broker

If you want to use the help of an estate agent for the sale of your house, this is only possible with an agency agreement. If the estate agent sells without a brokerage contract, he is acting in breach of his profession and can be held responsible.

If you don't want to commission an agent, you have to sell your house on your own. In our blog post "With and without an estate agent: How not to give away money when selling a house", I give you step-by-step instructions for selling a house without an estate agent.

Conclusion: sole agency contract usually more money

Even if the simple placement order reaches more prospective buyers, it does not mean that they will actually make an offer on your house. If your house is advertised on too many websites, it will look cheap or suspect. In addition, the action of several estate agents usually leads to a drop in price, as the property is advertised at different prices.

A sole agency contract guarantees you that the estate agent will carry out the sale conscientiously. As the contract is time-limited, the agent has a pressure to succeed in completing the sale quickly and achieving a good sales price in the process.

The chance of a quick, profitable sale is therefore only given with a sole agency contract.

As a real estate agent in Tyrol, a sole agency contract gives us the opportunity to work out the ideal marketing concept for your house. In addition, we can put more time and money into the right marketing.

Due to our large cooperation network, we reach many potential buyers for your property through recommendations from colleagues. In addition, we know the Tyrolean real estate market and know what prices we can achieve when selling a house.

You are welcome to take a look at our service portfolio in a free initial consultation and get an idea of what we can do for you.

With kind regards

Yours, Bernhard Großruck

Photo: Andrey Popov - stock.adobe.com