Balancing the rights and obligations of vendors and agents

Making sure that the agreement between agent and vendor is balanced can be crucial to the success of making a property sale. Agents need to be incentivized. And property owners need flexibility to ensure that if a property isn’t selling, they can change agents with little fuss. Vendorable is the world’s first online platform designed with this balance in mind.

Commission

Agents’ incentives come in two forms: commission and exclusivity. An agent who isn’t remunerated sufficiently for their work in selling a property will potentially underperform. In buyers’ markets this can prove fatal, and a property for sale can become stale. Buyers assume that stale properties must have something wrong with them, otherwise someone would have bought it by now. And so a bad situation is made worse.

Exclusivity

Exclusivity can encourage agents that the work they perform in selling a property will most likely pay off. The opposite to an exclusive agency is an open one where several agents may be competing to find buyers and only the one who seals the deal is entitled to commission. In order to provide an agent with exclusivity your terms of agreement need to say that you’ll pay commission to the agent no matter who sells the property while the agreement is in force. From a practical point of view, this prevents you from appointing another agent while your first agent is still working for you, since you wouldn’t want to pay two commissions.

A New Platform

This isn’t to say that you shouldn’t drive a hard bargain in agreeing terms with your agent. Vendorable uses market forces to help you do this. Using our platform, a property owner can post a job advertising that they would like a real estate agent to sell a property for them. The job includes key details about the property. Real estate agents then bid for that job with their key information such as commission, marketing costs and whether the agency is to be exclusive, sole, or open. A property owner can then compare bids from agents and appoint.

Vendorable’s Agency Agreement Rules contained in our Terms of Service provide that the default position with regards to ending an agency agreement is that either party may do so at any time without penalty. This means that property owners can move on if they want to. And agents can extricate themselves from difficult principals. This can be changed if the parties so desire.

Harry Lehmann