When listing an apartment rental, landlords have a few options they can choose from when listing the rental. They can either list it directly or choose from many real estate agencies in their area to list it for them. There are a few benefits that come with signing an exclusive right to rent agreement and there are important factors to consider before doing so.
What Is an Exclusive Right to Lease?
An exclusive right to lease is when the landlord gives exclusive rights to a company or to an agent to rent your property during a specific period of time. This agreement is unique because the company or agency is entitled to be the exclusive listing agent for the property and the landlord cannot list the property with another real estate company or agent.
This agreement is only in effect for a limited amount of time and a commission is paid to the agent if the property is rented out during the fixed term of this agreement. When vacancy rates are high, landlords can face some problems when companies do not have good marketing strategies to advertise these listings to the widest audience range.
What Are the Risks of an Exclusive Right to Rent?
Many landlords will say that this type of agreement limits exposure to their renting units and they are not able to list it with every brokerage. If landlords are careful to go through every option, they might find the right company and have a better outcome.
What Are the Benefits of an Exclusive Right to Lease?
While there are some risks associated with the exclusive right to lease, there are benefits of this agreement.
Many landlords are aware that multiple listing agencies list their rental units in different and insufficient ways. Being that the internet is so large, landlords can be interfering with their chances of having the best possible outcome if they do not work with a company that specializes in search engine optimization. Sometimes agents will not provide sufficient marketing channels and suggest that they will see what happens when they put it on the MLS.
While MLS is great for residential sales, it does not do well with getting apartments rented. Some successful real estate agents do well with co-broking rentals since the commissions are small when compared to sales listings. It is important to understand that the agent’s commission can become so minuscule when they need to split it between other parties and their office.
Many real estate agents take an apartment listing, put it on the MLS, and forget about it. This is why so many apartment listings or rentals do not do well on the MLS. If you give your exclusive listing to an apartment leasing company that has high ranking websites and uses search engine optimization, you will see a better outcome.
If landlords only have to work with one agent or company, they will have a much easier time communicating with the agent and scheduling showings. This will take a huge weight off the landlord’s back and will allow them to not feel overwhelmed. Having a single point of contact will lessen the number of calls a landlord will receive from real estate agents. When working with multiple agents, landlords might run into differences in opinion on what to do with their apartment. Working with one agent for the exclusive right to lease will surely help get the apartment rented in a short amount of time.
Dealing with only one agent, there is only one set of documentation forms that will need to be signed. Along with one set of forms, there is one stream of emails, and only one source for the landlord to receive rental applications from. With one single contact, landlords will benefit from better time efficiency with the process of renting. It is important to look over everything that needs to be signed. If the agent wants a 90 day or longer lease to be signed, the landlord should be careful as it suggests it may be difficult to rent the apartment out. Be sure the agent is diligent and shows that they are there to help the landlord get their listing leased.
When giving an exclusive right to rent listing to an agent, there are a few factors to be considered. Check that the agent has a proven track record and is experienced. Experienced agents want the landlord to feel comfortable and confident in their work.
Another factor to be aware of is the documentation and leasing paperwork should be created by a real estate professional. This documentation should be checked by a real estate attorney to protect all parties and to ensure the whole process of renting runs smoothly.
Signing an exclusive right to rent agreement is a lot to consider, but can have a great outcome if done properly. If you’d like to learn more about how we support and help our agents grow at Christian Saunders Real Estate, click here.