It can be a grey area between when property management begins and when sales and lettings takes over. Although these two worlds are very different, because they do overlap and complement each other they are often referred to as an all-in-one service.
So if you have a sales or letting agent first selling the property or finding a new tenant, then managing the property afterwards can appear to be an obvious bolt-on service. Alternatively, you may have a property manager already dealing with day-to-day matters, and when an imminent sale or new letting is on the horizon then they are the first ones to offer a letting or selling service.
On the face of it, this makes sense, with one party seeing the whole process through. From experience though, don’t automatically assume they are compatible, unless it can be clearly demonstrated that in any circumstances it can work under one banner.
You see, they’re two different skill sets really. The letting or sales agent is more deal-driven, and searching the market for the right person and agreement to be struck. The property manager is more detail-driven, and making sure that things are being run effectively on an ongoing basis.
The 5 Differences
From a property management perspective, here are five ways in which you can effectively work alongside a letting or sales agent. This might be with a completely different company, or colleagues within the same one. In actual fact, it could even be yourself with different hats on, and you may be doing the actual property management yourself rather than overseeing another party doing this.
These are not black and white terms or conditions, but rather principles to go by in order to make sure that these two facets of property work together nicely for your property interest:
1. Clarify Fees
The nature of fees with sales and lettings is different to ongoing management, as they’re often a one-off cost rather than ongoing over time. This needs clarifying up-front as to how this is calculated, for example whether it is a flat rate, or based upon a percentage of the final price or rent and based upon an actual completed deal.
Watch out that these don’t turn into ongoing management fees, and any basis of re-occurring costs later down the line, for example when the new lease is renewed.
On a practical note, also clarify how these are paid at the end – often as a deduction from any received rent monies or sales proceed, or they may need to be through property management accounts and any reserved rent.
2. Going Joint
You can get what they call ‘joint agency’ in that you have more than one agent marketing the same property, the idea is that it covers other marketing avenues and the one who gets the deal gets the fee.
These can work in scenarios where there is a mixed market to target, so maybe a more large and general one to cover a wider area and any online portals, but also a more local based one.
Make sure it’s worthwhile though, and any fees and basis are clearly agreed between the two.
3. Important Information
As property managers, you tend to have a whole host of information about the property to hand, right from building conditions and asbestos surveys, to any current leases and monies held. This information can be important to have for any new tenant or sales, whether through formal replies to enquiries through solicitors or from questions asked by prospective tenants and owners.
The secret is to be comprehensive, but to the point. Make sure things are covered and easy to hand and circulate, but that it isn’t overboard and so risk slowing the whole sales and lettings process down.
4. Access Availability
People will of course need to inspect the property and do viewings, and although this is straight forward on the surface, the detail can cause issues.
Make sure people clearly have access arrangements and things like keys and alarm codes issued, and an understanding of when and where they can attend. Also, if they need to see other hidden areas such as storage areas, and any in-depth surveys.
5. Heads of Terms
These are key, and unfortunately often missed in the frenzy of any new deal. You may have the basics like rent or price, length of lease, and names of people agreed, but try and iron out other things to form ‘heads of terms’ that people like solicitors can then solider on with to produce effective documentation.
So aspects such as VAT being included, service charges, utilities, and repairs can be a difficult hurdle later on down the path if they’re not dealt with at this stage.
The Perfect Match – Property Management & Lettings Agency
You really need both these aspects to property ownership and occupation working alongside each other to help provide the perfect match. You will of course always need the right people involved with the property paying the right price and rent, but then all effectively managed afterwards for long-term productivity.
Therefore go through these principles and see what existing arrangements can be improved, or look at other changes to suit. Although there might be cost and hassle in the short term making changes, whether a new instructed party or even individual, this can pay off longer term for everyone.