And Now, The Age Old Question Of Exclusive Listings

By Lona Rubenstein | 8 Comments

East Hampton - This email from Judi Desiderio raised the issue of exclusive rentals, giving Town & Country's strong (no surprise, right?) opinion as well. "Lona, [as a] widely read voice of real estate this issue must be addressed: There are some greedy agents ill-advising their clients (to whom they have a fiduciary obligation mind you) that they should give them an exclusive on their rental. The agents chat up 'control,' 'qualifying tenants,' 'superior market reach!' Well, it's almost never in the best interest of the owner to do an exclusive rental - but you know that - you've walked 10 miles in my shoes."

Didn't know this topic was so hot (and dangerous) as Montauk's Ed Bruel pointed out to Realty Takes in response to our email query blast. One way or another, besides fiduciary responsibilities, it seems to be all about money. Hard to believe! And also about work and time, which is, after all about money, too. You do remember time is money.

Property courtesy of The Corcoran Group

One issue raised is whether brokerages are willing to pay a fee to those exclusive listers even if the listor doesn't bring the tenant. Now who would have thought of that wrinkle?

Joe Schiffer, of Main Street Realty, writes, "You can anticipate long-time clients, who cannot sell at what they conceive as the "right price," and who will grant exclusive rental listings. I do believe however a better sharing of the commission between exclusive lister and rental agent should reflect the special relationship between the agent and the listing agent."

Susan McGraw Keber of Town & Country writes to her CEO: "Nancy McGann and I discussed the issue of exclusive rentals which seem to be taking over many rental listings that ordinarily would not be offered this way. I propose that homeowners be made aware of the disadvantage of listing their properties exclusively for rent in most cases, especially if they are in earnest to rent in hard economic times. It prevents website exposure and discourages sales associates and brokers from showing their properties. I believe an article as Nancy suggested by perhaps Lona Rubenstein, could illustrate these caveats [we raise] - in exclusive rental listings, a perfect opportunity to address professional acumen and dedication.

Veteran Broker Manager Charlene Cheshire of Westhampton Beach Town & Country makes no bones about where she stands: "Exclusive rentals do not serve the homeowner, just the broker. When brokers, who do an incredible amount of work, organizing what they're going to show, take customers to anywhere from five to 15 houses on average (you have to cover all the bases - competition is tough!), it stands to reason that they are not eager to split their 10 percent commission with an exclusive listing broker.

"There are always the high-end listings requiring more careful security and in those cases, an exclusive rental may be acceptable but those are the exceptions rather than the rule. What are homeowners getting for that exclusive listing? Tons of advertising? Special marketing? Weekly open houses? Check the local advertising to see if there is a deluge of rental advertising from January through May. I haven't seen evidence of it myself. So, in conclusion, here's the rule: I've always followed: exclusive rental: NO; exclusive sale: YES."

Charlene covers many issues here. But perhaps, playing devil's advocate in these hard, competitive times where, in some areas and price ranges, people aren't exactly tripping over each for a summer rental, homeowners with a sincere broker (like the handicapper in "Guys & Dolls," Fugue for a Tin Horn) might get an extra push for their property by granting this privilege. (Hey, guys, just setting up another point of view for consideration!).

Lori Barbaria of Prudential Douglas Ellimnan weighs in, commenting, "In the high-end over $250k they are feasible if the landlord wishes their broker to be present for all showings." Broker Jackie Dunphy of Corcoran East Hampton looks at it another way: "I think it gives the owners peace of mind knowing that a broker they know and trust is always present during a showing. A lot of high-end rentals have very expensive furnishings and it gives the owner extra financial and emotional security. I don't think it makes sense to have exclusive rentals for more modest listings." Jude Lyon of Westhampton Beach Realty supports the practice as well - "Best thing that ever happened to the homeowner - more exposure - know more about the tenants and makes it much less hectic on showings, and they know where their keys are. I'm finding the brokers who complain most about exclusive rentals are the brokers who don't do many rentals. I love it and think it makes it all a lot easier."

Yes, well, let's stop right there! What does Realty Takes think? Let you know next week, because East End real estate and deadlines are a very strange business.

Comments

Nancy from Sag Harbor, NY says:
In regard to the issue of security: 99% of the brokerage community I work with are responsible and professional. In order to show a rental property a broker must call for an appointment with the homeowner. It is easy to introduce yourself as a broker via email or internet which I do with regularity if the homeowner has not yet had the opportunity to have "met" me. The truth is there is a healthy absorption of homes this year that are now exclusive rentals and they do not serve the homeowner, just the broker. If I remember correctly, my fiduciary obligation is to the homeowner and clearly an exclusive rental listing is not in the owner's best interest. In this kind of market the homeowner deserves and expects the maximum exposure to potential customers/tenants. With an exclusive rental the homeowner has but one website and one brokerage representing their interests out of many qualified and professional brokers with well known and long established firms. To the broker who stated the brokers who complain do few rentals...a working broker participates in all transactions of real estate and the homeowners would most likely be surprised to know exactly what an exclusive rental means to their ability to rent their home. Ask yourself as a homeowner this question: would you mind not having your property viewed by as many potentially qualified tenants as possible if you wanted to rent your home and perhaps had to rent your home? Would it be alright with you if you knew other brokers did not want to show your house because there were other properties they could show wherein there was no split share with another brokerage? I believe it is my duty to be truthful to homeowners in every aspect of my representing them and I can not seem to see any possible advantage to the homeowner in taking their rental home as an exclusive, especially in this economic climate. Avarice clearly seems to be the operative motivation in obtaining such an agreement from an unsuspecting homeowner.

Tom D from Westhampton Beach says:
Let me think about this. I want to rent my house. The number of rentals is increasing. The price is decreasing. And I'm going to give you an exclusive so the only way a potential renter can find my house is to find one realtor who has the listing? Makes about as much sense as the exclusive sales listing using the exclusive Hamptons MLS service OREX. The Wall Street fallout is moving east. The greedy realtors will not survive. I'll be one of the vultures talking to you after the summer and into the winter when the supply of homes on the market will take 2 years or more to sell or rent. Sure hope the weather is nice this summer!

disgusted broker from north fork says:
Does the phrase "call my broker" mean anything to you people. A client is well served by a competent agent- who is willing to co-broke listings either via mls or faxed over co-broke to non mls members- A client with an exclusive listing agent has someone running the show- literally supervising the listings, making sure the doors are locked- and most importantly- screening tenants for the landlord- to ensure everyone benefits from the deal- and landlord and tenant are happy- which makes for repeat business- a real estate professional must put the needs of the client above their own gain- it is part of the often forgotten code of ethics-

laurie mindnich from southold says:
Actually, the larger companies are members of the MLSLI. They use it for some areas, but persist in not participating in other areas- contrary to published rules of membership that all members agree to when joining. They don't believe that the additional exposure is important- as houses sit, and sit, in this market. It's pretty amazing.

X-Realtor from Sag Harbor says:
I came to the Hamptons thirty years ago from another state where I had been a Realtor. MultiList is the only way to give a client the best possible service. This is true for both the seller, buyer, and in the long, the agent. Why don't we have it in the Hamptons? Need anyone ask in this day & age out on the East End? Greed...agents out here never learned to share when they were young.

ME from Maine says:
If an "exclusive rental" is not in the best interest of a homeowner, then the corollary "it's also not in the best interest of homeowners who wish to sell their properties either" should be true, too. The old "exclusive" selling model is wake of the dodo bird. The only model that can truly represent the buyer or renter is one who represents them through buyer's agency. Don't you love the term "tri-exclusive" and "quad-exclusive"?? Just call it what it should be... an open listing.

laurie mindnich from southold says:
These companies are whining about exclusives??? Have they taken a look at their own listings yet? Fiduciary is present in homes for sale, as well- talk about a kettle...

James Young, from East Hampton, NY says:
This is a simple one. An exclusive rental agreement from a marketing perspective is NEVER in the interest of the homeowner. For an agent to claim otherwise is misleading. The fact is rentals are hard work for agents and to have to split a relatively small fee will dissuade other agents from showing the house in question. That said, if security and control of access takes precedent for the owner over market reach then perhaps an exclusive makes sense for the reasons cited in the article. But there's definitely a trade off, more security for less reach.