An Open Listing arrangement allows multiple brokers to compete with each other to find a suitable tenant to rent a vacant apartment. It works best in markets such as New York City, with a high volume of interested leads , but very low rate of actual transaction. Open listings are similar to crowd sourcing, where the landlord gives a crowd the opportunity to secure availability.
Unfortunately, most perspective renters who want to view an apartment will ultimately not sign a lease. Either they don’t like the apartment, can’t afford the apartment, or want to keep looking for better options. That is why in 2020 we still need a network of professional apartment finders to qualify both sides – they only show good apartments to qualified renters.
*Markets tend to be more efficient with more competing participants.
RentHop’s Model
At RentHop, we host both open and exclusive listings. In some cases, an exclusive is the most appropriate – especially a For Rent By Owner situation when there is not enough regular inventory to enlist a roster of brokerage firms. You either show it yourself or hire an exclusive agent to do so.
Do Larger Landlords Need Crowd Sourcing?
However, for the medium and larger landlords, we have tens of thousands of datapoints that all come to the same conclusion: agents who service open listings are faster to reply to renters, and ultimately work harder to close the deal. Any given renter lead or agent is unlikely to work out, but collectively, all the agents work in parallel to sift through dozens or hundreds of showings before filling a vacant apartment. And if the renter and apartment are a bad match, maybe other nearby apartments will work.
Unfortunately, an agent who “wins” an exclusive listing no longer has much incentive to spend time and resources renting it quickly. And even the most diligent agent is only one person, or one team, who can not process all of the incoming leads. Finally, the exclusive agent might suggest other listings, but if they are doing their jobs well, they should focus entirely on marketing their exclusive. In a world with only exclusive listings, renters are forced to do far more of the legwork and research, while vacancies continue piling up.
Editor’s Note: We updated this article to enhance readability.
