I am considering SELLING my home (Sydney suburbs) in about 3 months time. The last time that I was familiar with Real Estate commissions was 20 years ago.
Then a lot wanted 2% and about the best acheivable was 1.5% + GST.
Since then property values have increased quite a lot. Without a similar rise in selling agents costs I can't see justification for such a % based commission.
I would like to be ready to negotiate, rather than just ask an agent for their fees.
Any tips would be appreciated. Thanks.
Real Estate Agent Commission - What Should I Aim for ?
Peck on 03/07/2019 - 13:04
Comments
Sometimes the lower the commission, the higher the volume, this might not help achieving the highest sale price and you may lose what you save.
Apparently in NSW the range is between 1.4 and 2.5%, but may vary by suburb:
"Glebe commissions average is 2.15%; in Surry Hills, the average is 1.97%; Commissions in Woollahra average around 1.95% and in St Leonards commissions average around 2.02%"In addition, tiered commissions are common (higher % for the $ attained over a base $ figure).
There is more to selecting an agent than the commission rates alone; success in attaining the price you want in a reasonable timeframe is a key measure, but the commission rate is certainly a consideration.
Thanks. In my area my impression is that Agents are thirsty for listings, and I thought that there would be room for negotiating on their commission. I would only use 'cheapest commission' as a selection criteria if I felt that 2 agents seemed to me to be equal.
We sold recently and managed to negotiate 1.8% if the sale price achieved is lower than $xxx,xxx BUT if the agent can manage >=$xxx,xxx we were willing to offer 2%. Bit of an incentive for them to work for.
They tend to start at 2.5% at the beginning of the negotiation but remember, these guys are desperate, things are tough atm in RE.
Property sold in west sydney
Thank you
Great advice!
IMO this is the thing to do. Negotiate for a tiered approach to keep the REA actually interested and working.
Eg: REA blurts out house is worth $1M? Fine, no commission for the first $980K, then 25% for anything above $980K.
$250k comms for the RE - great deal
edit - 25% above $980k, not as good.
Wouldn’t that work against you because the RE would just flat out reject offers <980k?
@quirki: In my experience, it assists the RE with getting buyers up from $xxx to $xxx to help get the bonus comm…after all isnt that the magic we pay for?
With our sale, it helped give the RE a realistic target (we didn't put the extra commission at an unrealistic value, just what we WANTED which was reasonable. It helped the agent get that price using their magic.
Again, as a seller, you need to be realistic. Dreamers sit on market for over 44 days and try to flog a dead horse
@quirki: If the REA gave an accurate price then this should not be a concern as appropriate offers should be there.
If the REA was a liar then of course they would reject such a proposal. If accurate they should welcome the challenge.
Look at recent sold history in your area on RE . com and see what agency is most active. Talk to them.
0.85% inc. of GST, one and a half years ago in true OZBargain style :-)
Depends really. If the agent has a choice of introducing a cash buyer to your home at 1% or a similar home at 2% what do you think they would do.
They may also have a different meaning of justify (very critical) in their mind. A lower commission may not justify extra effort to sell your home, it may not justify promoting your property as much as much, it may not justify trying to get you a better price when they just want it to sell and move on to the next vendor who is prepared to pay 2%.
You may also be able to get a shitty agent who can justify the lower comm because they need the cash due to not bing very good.