How to choose the best agency to rent my flat?

Exclusive or non-exclusive? Large or small property portfolio? And what you may be wondering, in short, how do I choose the best agency for my property? rent my flat?

Two models: agencies-boutique vs agencies-warehouse

If, for the purposes of simplification and clarification, we take all the real estate agencies in the country and take their commercial strategies to the extreme, we can divide them into two large groups: agencies-boutique y agencies-warehouse. You will be able to easily understand which type of agency you will feel more comfortable with as a client based on their way of working and objectives.

The agencies-boutique manage a small portfolio of properties, establish close relationships with their owner-clients and generally have small and stable commercial teams. Their commercial strategy of small portfolio / high turnover forces them to reduce risk as much as possible and therefore:

1. They capture housing in good demand.
2. They capture at appropriate prices.
3. They capture exclusively.

In contrast, the agencies-warehouse accumulate huge amounts of properties whose owners they know little or almost nothing about. Consciously or not, this type of agency trusts its sales to probability ('If I manage a lot of properties, probably some will sell') and therefore:

1. They capture everything.
2. They are catching at any price.
3. They do not demand exclusivity, even if they prefer it.

Let us forget for a moment about owner-occupiers and accept that they can choose one type of real estate agency or another. It is not a question here of determining which agency model is preferable for their interests, but rather of to understand the virtues and risks of each model and to develop a reflection that will allow active real estate agents or those who are considering starting this activity to choose one model, the other or their own mix of both.

Characteristics of a good real estate agency

Most of the agencies I know (including our own agencies) have been Monapart franchises) who work on an exclusive basis, have no more than twenty properties in their portfolio. Obtaining exclusivity is hard work and involves recruitment and marketing costs that should only be assumed when the property has a high probability of being sold.

Those who have experience working in exclusivity capture well and at a good price because they know that the cost of failure - ending the exclusivity without selling and without being renewed - is very, very high.

However, what happens if you opt for a model in which you capture absolutely everything without setting conditions or barriers to access? And if you do not invest in achieving the sale but wait for the property to "sell itself"? Well, the costs of attracting and marketing are infinitely lower than attracting exclusively and therefore the cost of loss (that an owner does not renew or goes to another agency) is much lower. Much more is attracted, in less time and with fewer demands.

So what does it depend on whether an agency works with one model or the other? In my opinion, it is a question of values.

There are sales-oriented and customer-oriented real estate agencies. The former are those that prioritise closing deals in the short term over any other indicator. They set annual sales and/or turnover targets and reward their agents (if they do so) for meeting sales targets. These are often agencies with large sales teams and high staff turnover.

In contrast, customer-oriented agencies tend to focus on building long-lasting relationships, working on after-sales and laying the groundwork for future customer referrals. They are agencies that reward their sales team based on sales and customer satisfaction. The nature of their model requires a much more artisanal process based on small, intensively managed portfolios.

Contrary to what it may seem, it is reasonable to think that the net profit per house sold may be very similar in both types of agency. (one for efficiency, the other for volume), although the two models are so different and polarised that it is difficult to believe that companies belonging to one and the other can share similar values. And nothing highlights this difference like human resources policy.

Any agency that wants to build a stable, motivated and happy team knows that it cannot eternally subject its sales people to the drudgery of cold-door recruiting, weekly mailings and sporadic, low-intensity customer contact. Companies immune to high staff turnover can do all this and more. Companies capable of making the incorporation and training of their new agents profitable in a short period of time.

The agencies-boutique need a consolidated and motivated team to be able to implement their model. customer-orientedHow can we work well on loyalty and after-sales if we change sales teams every six months? The agencies-warehouse They need to constantly acquire large numbers of properties, but their uncomplicated and unconditional approach to property acquisition allows them to have a constantly rotating sales force. Generalising, I would venture to say that there is a relationship between staff turnover and the size of the housing portfolio under management.

Conclusion: what would be the best agency to rent my flat?

I am aware that the argument in favour of the agencies-boutique (exclusivity-representation-MLS) is consistent and powerful, but it is no less true that there are many traditional agencies, large or huge, internationally established and applying almost opposite management models, which are in excellent health.

There are animals that give birth to one or two offspring and defend them with their own lives to ensure the survival of the species. Others lay thousands of eggs to ensure that some of them will give birth to the offspring that will guarantee their biological legacy. Survival by care and vigilance versus survival by probability.

It is up to each real estate agent to decide which model resonates most with our values and will allow us to have the company we envision, and it is up to each client to successfully choose the agency that best suits their needs and how they want to feel about the process of marketing their home.