Real Estate Agent Asking to Sell at Desired Price and Keep The Rest?

newbiesh on 25/05/2021 - 16:34
Last edited 25/05/2021 - 18:25 by 1 other user

So selling a house currently valued at $550K I got a call from a real estate agency that asked how much I would be happy to sell it for and they would keep the rest if unsold within 3 months they can cancel contract without a fee.
I just said $620K and surprisingly he found a buyer willing to pay $690! That's like $70k for the agent for like a week of work without advertising!

I'm bit feeling concerned now to be honest, this is my first time selling a house is this currently legal ?

I would be paying the capital gain for his gains as well?

Home & Garden

Comments

  • djkelly69 on 25/05/2021 - 16:38
    +2

    What does the contract you signed say?

    Also you don't pay CGT on money you don't receive, you pay it on actual gains.

  • AndyC1 on 25/05/2021 - 16:40

    Did you sing any contract? Did you agree to any SMS, emails or any thing that the REA sent? Was there any verbal agreement?

  • orangetrain on 25/05/2021 - 16:41
    +44

    Your solicitor was correct when they said to get advice from Ozbargain. Please attach your contract, address and any more details. Our armchair experts will give unqualified advice.

    • SF3 on 25/05/2021 - 16:52

      armchair experts will give unqualified advice.

      Only the best.

  • tsunamisurfer on 25/05/2021 - 16:47
    +2

    This is highly irregular. I smell a scam.

    How much research have you done?

    Is it possible that comparable properties in your area are worth $690k?

    There are 2 ways of looking at this.

    1) you are getting $620k for a property you thought was worth $550k.

    2) You were way off and the market price is $690k and you have agreed to a commission rate of 10.1% (normally 2%).

  • SF3 on 25/05/2021 - 16:51
    +6

    I got a call from a real estate agency

    Am confused, as to what you have actually committed yourself to.

    Your post is missing too much critical information.

    Doesn't sounds like you've committed to anything, as you haven't told us any formal commitments you've made.

    Ok, can you tell us, what you have formally committed yourself to? Who are all the entitles involved and your commitments to them (if any).

    • poboy on 25/05/2021 - 18:30
      +2

      The post has enough information for me to be outraged. Why isn't something done?!

      • SF3 on 25/05/2021 - 20:44

        This could be the beginning of OP suffering from sellers remorse.

  • Subere on 25/05/2021 - 17:07
    +10

    I love these kinds of threads.

  • djones145 on 25/05/2021 - 17:17

    omg in will given a million for the house

    stop the sale and sell to me

  • MS Paint on 25/05/2021 - 17:26
    +2

    WTF have you done OP?

    This is some weird sh!t right here.

    Please upload copy of contract with personal details blacked out.

  • apsilon on 25/05/2021 - 17:27
    +1

    Was it the REA or the buyer (who at the time was just the valuer) who gave you the $550k valuation?

  • kobeduck on 25/05/2021 - 17:36

    Hahahahahahahahaha

  • mbck on 25/05/2021 - 17:47
    +2

    No reply lol.

  • Pelicannn on 25/05/2021 - 17:59
    +4

    So it sounds to me like the real estate agency offered to buy your house for $620K, and that you would receive that money on sale, but anything they make over that, they would keep, but if they couldn’t sell the house after three months they were entitled to cancel the contract and get their $620K back and give you your house back?

    Hope you didn’t sign pen to paper cause this sounds dodgy AF, especially if the same REA valued it at $550K which they definitely are not allowed to do (if you can prove it).

  • bobbified on 25/05/2021 - 18:05
    +1

    What the… ? This is just something you just should not agree to in this kind of unpredictable market!
    I hope the $550K valuation isn't one they provided you! For such an agreement, it's in their interests to value it as low as possible to get the biggest difference!

    Right now, I'm really not sure whether to laugh or cry for you!

  • 87percent on 25/05/2021 - 18:10

    Have you not read the news for the past few months?? There’s FOMO on people buying properties and house prices are sky rocketing and FHOG can’t get their foot in the door without going to bank of Mum and Dad. Now they’re all pissed because their smashed avo and matcha latte is too expensive and they can’t afford bitcoin

    • netjock on 25/05/2021 - 19:48

      FOMO is for people who are inviting problems down the track.

      I am surprised when I saw the other day that some places are charging $5 for a coffee and I thought $4 was steep. It is world beating prices.

  • Baysew on 25/05/2021 - 18:24

    So you are selling your house

    valued at $550K

    You are happy to sell at

    $620K

    I don't see that you have done anything illegal, you just sold it for more than it may be worth.

    No capital gains tax on your main residence.

    • newbiesh on 25/05/2021 - 18:25
      -2

      but it just feels too good to be true you know what i mean? how the price could get pumped so high…feels like ripping the buyer off.

  • sparkles on 25/05/2021 - 19:44
    +1

    So the REA can find a buyer willing to pay $690, but ONLY if they happen to be the vendor? WTH. I'd be asking why they haven't just simply sold your property to that buyer already.

  • netjock on 25/05/2021 - 19:47
    +2

    I would suspect it isn't a properly regulated REA. Simply put ethics wouldn't allow you to do that. If OP agreed to something like that then they are foolish.

    Only think you negotiate is the % commission OR fixed $ commission (minimum or maximum). Regardless whether it is a FOMO market.

  • OzCheapo on 25/05/2021 - 21:07
    +1

    Name checks out OP.

    If there's a contract, go to a solicitor but if I was happy with $620K, why not take the money?

    • Travis J on 26/05/2021 - 01:15

      because he's jealous the agent made 70k in a week.

  • bdl on 25/05/2021 - 21:42
    -1

    LJ Hooker Bikies, You're the best!

  • morse on 26/05/2021 - 01:49

    Don’t sell through this agent unless you’ve signed something that means you have to, and even in that scenario get some legal advice If it’s a genuine offer, your house is not valued at $550k, it’s valued at $690k - your house is worth what someone is willing to pay. The fact they approached you with this kind of deal sounds suss. Have you checked to see they are actually a licensed real estate agent?

    I would find a way to end the relationship with this agent and re-list the property with a different agent.

    Also make sure you have a solicitor review the contract and read it thoroughly yourself or you might end up with the agent taking the whole $690k for them self.

  • Euphemistic on 26/05/2021 - 06:54
    +1
    1. The house is not valued at $550. It’s closer to $700. It’s a sellers market and prices are crazy.
    2. Never give the agent 100% of excess. Ive heard a seller offering 20% of anything over $x. That significantly more than commission so they’ll work hard AND you get the benefit.
    • SlickMick on 26/05/2021 - 21:00
      +1

      I've always felt that this is how commissions should be calculated.A normal commission pays the most for selling it under market value, and lesser increments for where the hard work lies, in getting a higher price.

      A normal contract encourages an agent to seller low to sell early and move on to the next commission. This way like you say gives an incentive to get a better price. But I'm learning from this example that it assumes that you know what the property is worth.

      • Euphemistic on 26/05/2021 - 21:05
        +2

        It should be the agents job to know the property’s worth and get the best result for the seller.

        If they have additional incentive, like additional commission past a certain amount they’ll work harder. If the commission is flat fee their incentive is to sell quickly it doesn’t matter what the price is.

        • SlickMick on 26/05/2021 - 21:59

          I totally agree. I haven't sold a property for a while, but in my experience they were always worse than flat fee, it was a fixed percentage up to less than the value of the property, then a lesser % for even getting asking price.

          Always thought the industry needed reform.

          • Euphemistic on 26/05/2021 - 22:16

            @SlickMick: It’s partially the consumer’s fault. Sellers see ‘flat fee’ or ‘low commision’ and think they’ll save a bucket on their transaction costs. They see that the commission is costing $2k extra, but fail to see they’ve increased the price by significantly more.

            We bought our current house in a bit of a boom, offers from multiple buyers . The agent set a deadline about 5 days after the first open house for our final offer. This out a lot of stress on for a short period of time. Had he negotiated a little longer/better I was prepared to go about $20k higher. I suspect the commission was high enough already.

  • onetwothreefour on 26/05/2021 - 07:56

    Just try going to auction with another real estate agent, you'll end up with more money.

  • Porker on 26/05/2021 - 08:13

    Was it just a cold call from a REA? Or did you sit with them and go through a sales contract etc and this was one of the conditions they stated?

    Sounds odd if the latter. Sounds even worse if you agreed to it.

    If it's the first option, then kinda makes sense like a sales person would keep bugging you until they make a sale.

  • AndyC1 on 26/05/2021 - 09:14
    +2

    Looks like OP has gone to ground as only one response.

  • OzHunterNSW on 26/05/2021 - 10:35

    Hang up on them…. what a SCAM
    They know the price, and they know they can sell.

    Go to someone more reputable and respectable.

    These scams are getting beyond the joke. Tell them you will report them.

  • Member 0230 on 26/05/2021 - 12:33
    +1

    I got a call from a real estate agency that asked how much I would be happy to sell it for

    I recently read from Jenman:

    If you want to a property for the best price, there is one secret you must never tell… your bottom line, the lowest price you will accept is the selling secret you never tell.

    • ihbh on 30/05/2021 - 20:09

      Note: the ethical agents that Jenman provides to his clients have to pay him big bucks, so they won't be discounting their commission to sellers (compared to approaching them directly).

      • Member 0230 on 30/05/2021 - 20:55

        I've never had to sell a home - mine or anyone's - so my perspective is coloured by Jenman and what he says are the underhanded, self-serving, or just plain lazy practices of many estate agents 🤷🏻‍♂️

        If ethical agents are paying Jenman "big bucks" (any idea of the amounts?), maybe it's still worth going to one because you know the main differentiator is that they'll battle to give the home seller the best price they could?

        • ihbh on 30/05/2021 - 21:29

          Sorry, I forgot to put ethical in quotes ("ethical").

          Why would other agents not get the seller the best price they could? How do you discern "ethical" agents - the ones that do Jenman's former course, pay his kickback? (It's not as simple as it sounds).

          How much more would you be willing to pay for an "ethical" agent, if you could discern one?

          • Member 0230 on 31/05/2021 - 11:17

            @ihbh:

            How much more would you be willing to pay for an "ethical" agent, if you could discern one?

            That is the question, isn't it?

            Given the many stories Jenman's shared over 15+ years of people who've lost tens/hundreds of thousands of dollars to dodgy agents? If it was my home I'd personally look into the difference a so-called ethical agent can do for me.

            A quick search for "Jenman Approved" agents shows they must agree to "8 Seller Protection Points" — sample agent here. Is it worth the paper it's written on? No idea. Only someone who's actually experienced the difference with both a Jenman and a non-Jenman agent can say.

          • Member 0230 on 31/05/2021 - 11:30

            @ihbh: Maybe another good question: Is Jenman a conman (and I'm drunk on his kool-aid)? Maybe.

            The public record shows he’s a very strong and vocal advocate for home owners — I learned of him from his book “Don’t Sign Anything” in 2013, and his latest blog is “Don’t Deal With Dodgy”.

            He's made plenty of enemies, punched, kicked and hospitalised (ABC interview with Paul Clitheroe of Money fame), and received death threats (SMH) for his efforts.

            I just saw this now: his testimonial page has maybe 250+ people — full names and contacts numbers.

            I think he's the real deal.

            • ihbh on 31/05/2021 - 17:41

              @Member 0230:

              I think he's the real deal

              Even if he is, does he need to take so much from sellers who list with his recommended agents?

              Even if he is, what's to say the agents he recommends are as ethical?

              What's to say a very ethical agent will get you the highest price?

              Most importantly, what's to say most of the agents who don't pay him big bucks, aren't ethical?

              Also, the trade-off, would you pay a 1 year experienced agent he recommends vs a 20 year veteran who doesn't pay him anything and isn't recommended and has hundreds of positive reviews?

              I don't want you to be sucked in my clever marketing, which Jenman is very good with - I've done and passed his course (to understand the sell side) and sold with Jenman approved agents (who've done things they shouldn't in the course, because I was more experienced than that agent and extracted the information I needed from him). At the end of the day, agents need to make a living, so don't believe all the marketing hype you hear; also don't assume the worse in everyone. It's easy to beat up exceptions and imply that it applies to the industry, which it doesn't.

              PS: I just saw:

              Jenman a conman (and I'm drunk on his kool-aid)?

              He doesn't need to be a conman; he's a very good marketer. And you're very inexperienced based on your replies and we're all susceptible to good marketing.

              • Member 0230 on 31/05/2021 - 18:27

                @ihbh:

                And you're very inexperienced based on your replies and we're all susceptible to good marketing.

                Well, I was quite upfront with that one ☺️ —

                I've never had to sell a home - mine or anyone's - so my perspective is coloured by Jenman

                I like what you say:

                At the end of the day, agents need to make a living, so don't believe all the marketing hype you hear; also don't assume the worse in everyone.

                Hear, hear.

                Ultimately, few of us need to sell our homes frequently, so it's back to your question: Without the experience you have, How is the regular Joe Blow (like me) to know which estate agent to trust?

                Will an agent in business 20 years get you better results than another who's done 10 or 15 years?

                With no objective criteria and no impartial third-party expert to scrutinise agent behaviour, I find this a tough question.

                Getting hospitalised from physical assault and receiving multiple death threats does paint the picture Jenman believes in his cause, good marketing or otherwise.

                Personally I'd love to know how to find a great agent when one day I sell my first (or second or…) house.

                • ihbh on 01/06/2021 - 07:24

                  @Member 0230:

                  Personally I'd love to know how to find a great agent when one day I sell my first (or second or…) house.

                  Hopefully you'll find my book where I've shared my experience and those of others. :)

              • Euphemistic on 01/06/2021 - 07:20

                @ihbh:

                He doesn't need to be a conman; he's a very good marketer.

                There is only a very fine line between a good marketer and a conman. Both are intending to relieve people of as much cash as possible. It’s just one does it with the appearance of doing so legally.

                • ihbh on 01/06/2021 - 07:21

                  @Euphemistic: He seemed to idolize him so I didn't point out that subtlety.

                  • Member 0230 on 01/06/2021 - 08:15

                    @ihbh: Idolise is… too strong a word.

                    “Admire” perhaps 🤔 (given very little knowledge as pointed out).

                    Regarldess, I’m happy to be disabused of wayward notions.

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