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Sole agency vs multi-agency: An investigation of agency practice across England and Wales

This paper investigates the impact of different agency practice on agency fees, business efficiency, and housing market liquidity by studying the effect of sole and multiple agency practices on estate agent efficiency, housing market liquidity, and commission fee levels. The analysis uses the survey data from the Woolwich Cost of Moving Survey (a national survey of transaction costs on residential properties sponsored by the Woolwich/Barclays Bank) from 2000 to 2006 to investigate the different agency practices across England and Wales and their effect on estate agency business efficiency, housing market liquidity, selling price, and fee levels. The empirical analysis confirms that agency practice has a locality bias, that is, some regions are more likely to adopt sole agency practice than other regions. The estate agents with a sole agency practice charge a lower agency fee, help clients to achieve better selling price and are more efficient; whereas multiple agency practice facilitates liquidity in the housing market, but experiences higher fall-through rate. There is little other research that investigates the residential estate agency practice and its impact on housing market in the past three decades in England and Wales. The findings are a useful guide for practitioners to better understand the issues associated with different agency practices and should enhance business efficiency and performance.