Exclusive and non-exclusive agency agreements: what do they mean?

It is not always easy to distinguish between a sole agency agreement and a non-exclusive agreement. Here is a simple explanation that will help you tell them apart.

The sole agency agreement

A sole agency agreement is a bilateral contract between an estate agency and a property owner. By signing this contract, the owner grants a single agency the exclusive right to sell their property. It is valid for three months, although the owner has a 14-day cooling-off period after signing.

As with any contract, a sole agency agreement must meet certain requirements. It must include the following clauses and information:

• Full details of the owner’s identity;
• The contact details of the estate agent responsible for the property;
• A full description of the property;
• The registration number in the agency agreement register;
• The sale price;
• The agent’s fees;
• The term of the contract;
• The terms and conditions for terminating the contract;
• There must be as many copies of the agency agreement as there are parties. In addition, each copy must bear an original signature; otherwise, the agreement will not be valid.

Advantages and disadvantages of a sole agency agreement

As with any contract, a sole agency agreement offers many advantages:

• The assurance of a quick sale. Selling under a sole agency agreement generally takes three months, whereas a sale under a non-exclusive agreement can take twice as long;
• The estate agent responsible for the property may be more motivated because they are solely responsible for it. They will therefore probably do everything possible to complete the sale within the period stipulated in the contract;
• The seller is more likely to maximise their net proceeds, as prospective buyers will not be able to use competition between agencies as leverage to negotiate the price;
• A sole agency agreement also offers a logistical advantage, as only one agent conducts viewings of the property.

However, it also has disadvantages. Many sellers are wary of the exclusive nature of this contract and of committing to a single person for three months. You must therefore find an agent whom you trust completely before granting them the exclusive right to sell your property.

The non-exclusive agency agreement

Like a sole agency agreement, a non-exclusive agency agreement is a contract between a property seller and an estate agent. It is more flexible because it is not restricted to a single agent. It is generally valid for three months, although this period may be shortened or extended, but the total duration may never exceed one year. Unlike a sole agency agreement, a non-exclusive agreement does not offer a cooling-off period.

With a non-exclusive agreement, the seller may therefore choose to instruct several agencies and may also sell the property themselves. In this case, if an agent completes the sale, that agent will receive the sales commission.

A non-exclusive agency agreement must also contain certain mandatory information:

• The seller’s contact details;
• The registration number in the agency agreement register;
• The agent’s professional licence number;
• The amount of the commission;
• The agent’s obligations to use all reasonable endeavours;
• The property reference;
• The term of the contract;
• The minimum commitment period.

Under this contract, the agency or agencies undertake to do everything possible to sell the property. In return, the seller agrees not to sell the property independently to a prospective buyer who was introduced to them by one of the agencies.

Advantages and disadvantages of a non-exclusive agency agreement

A non-exclusive agency agreement has one major advantage: allowing several agents to sell the property maximises the chances of a sale. However, it also has several disadvantages:

• Property valuations may vary from one agency to another. Care must therefore be taken to ensure that they are consistent across the different agencies;
• Risk of devaluation. If prospective buyers see the same property advertised by several agencies, they may think that it is not selling or that it is difficult to sell;
• Agents may be less motivated than if they had exclusivity, and the sale could take longer than under a sole agency agreement.

In conclusion, despite their many differences, these two types of contract share certain similarities, advantages and disadvantages.