Qld advertising costs?

Am considering selling off some Qld property and would like to know people's thoughts about advertising costs. REA's charge 5% commission for the first $18K and then 2.5% after that, not including GST. Most agents I've spoken to are not negotiable about this, but seem to be wavering when it comes to advertising. Some don't charge anything for it, whilst others are ambiguous about how much it will cost me, due to time on market etc.

Can anyone shed any light on how much I should be paying for 60 days on the market (if any)?

Some agents in Townsville are advertising free advertising ATM

Jax,
The example you gave appears standard in SE QLD - however the agent I am currently using is a flat 2.5% plus incidentals (qtr page ad in REIQ mag for $85 extra).

That sounds like a good deal, Perky- already knocking $450 off the first $18K. Hope it sells soon

Where are the properties Jacque and I may be able to put you in touch with someone.

Kev

www.nundahrealestate.com.au

The Agent I used in SE QLD recently did not charge for advertising.
They advertised the property on the internet, in the local papers, and Local RE Magazine.

Yep,I spoke to an agent on the Northside who puts your property on the internet for free if you dont want to pay for advertising..

Hi Jacque
Ads should be effective. Some REAs rely on income from vendors to flog their REA name. See some examples first. Cost of ads should be a shared risk, not carte blanche, otherwise you end up promoting the REA more than your property. Average property, market price, $450 should be plenty.
cheers
crest133

Hi Jacque

Photo ads in the quest newspapers cost $110 per week (local papers such as the south east advertiser) compared with $700-$800 for the same sized ad in the Courier Mail. I personally think that unless you're house is really something special quest is the way to go. Some of the big agencies will suggest up to 1% of the sale price be used on advertising, I think the $110 per week is sufficient and the agent should pay for internet and direct mail themselves.

Darryl

Recently negotiated with a Noosa REA & agreed 2% flat rate up to our target minimum selling price & 25% thereafter as an incentive to achieve a better price. They were happy and so were we, although we decided not to sell eventually. This did not include the advertising though.

Harpic said:

Recently negotiated with a Noosa REA & agreed 2% flat rate up to our target minimum selling price & 25% thereafter as an incentive to achieve a better price. They were happy and so were we, although we decided not to sell eventually. This did not include the advertising though.

Click to expand...

Mmmmmmmm.

Either it was not a residential sale or you're agent was operating highly illegally (or you made a mistake, did you mean 2.5% thereafter). The MAXIMUM an agent can charge in Qld is 5% of the First $18,000 and 2.5% of the balance ( plus GST). Anything above this is acting outside the Property Agents and Motor Dealers Act (PAMD) and therefore against Govt. legislation.
You can find more info on the legislation at www.consumer.qld.gov.au

His name wasn't Joh and payment to be delivered in a brown paper bag was it.

Kev

www.nundahrealestate.com.au

No Kev, my figures are as given.
I agree ..Mmmmmmmm indeed!!

We didn't sell, so I guess nothing illegal committed.
We suggested the arrangement.
The arrangement was with one of the main REAs in Noosa with a nationwide REA franchise.
Thanks for bringing that to my attention - I will look at the link when I have time.
It seemed a good deal to me though.

Regards
Harpic

We didn't sell, so I guess nothing illegal committed.
We suggested the arrangement.

Click to expand...

Umm indeed, would just love to know who but understand you might not be open to that.

On a similar vein over the years I have had a few owners offer me $x amount extra for a speedy sale. When I kindly refuse and state that I will be happy with the commission as stated some have said "well some other agents didn't say anything about that" to which I replied "obviously they do not treasure their licence as highly as I do" They are not easily acquired but can easily be cancelled.

David E-Noosa said:

Umm indeed, would just love to know who but understand you might not be open to that.

On a similar vein over the years I have had a few owners offer me $x amount extra for a speedy sale. When I kindly refuse and state that I will be happy with the commission as stated some have said "well some other agents didn't say anything about that" to which I replied "obviously they do not treasure their licence as highly as I do" They are not easily acquired but can easily be cancelled.

Click to expand...

I have been made similar offers too and my reaction was very similar to David's also. One was from a guy who ended up in jail for $6mil fraud. That explained why he was so happy parting with cold hard cash for his advertising account

Qld remains the only state of Australia with a regulated industry for Real Estate. Qld is the lowest paid within the industry. First National benchmarking figures show the Australian average for commissions at 2.95% whilst they are 2.55% (as per legislation, which also shows nobody negotiates this figure) in Qld. Our prices also remain substantially lower than many other states ( My office is 7km to CBD and av. price is around $350,000 for houses).

Kev

www.nundahrealestate.com.au

Forgive my ignorance - have yet to sell a property.
But in whose interest is the legislation if it effectively prevents negotiation?
Doesn't that mean there is little/less incentive for an agent to put in any work to get a better than average price for the vendor?
If there is really only one (fair) price for a given house, then surely all we need are valuers?
I don't understand.
Harpic
PS yet to bag my $6mill

Harpic,

The 'fair' price for a property is what someone is willing to pay.

What someone is willing to pay depends on their wants, needs & capacity to pay.

This is where negotiating is important.

Agents don't really make much more money by negotiating a few thousand bucks more....so the incentive for them isn't always the commission - it's their commitment to providing their client with the best service....which aids them in securing future business!

Cheers,

Aceyducey

Hi Harpic,

Ideally Acey is correct, irrelevant of whether someone deals in RE regularly or every 7 years as per the average Australian. The idea is to not only deal with that customer but to be referred to all their friends and relatives also. I say ideally because most agents don't get it and just go chasing "today's" business and never see past the nose on their face. RE is about building relationships and the elite agents have high repeat and referral business ratios.

The RE industry has been lobbying for a change in regulation to a deregulated market, as it is in all other states, however the state government has never sanctioned it. In my opinion this is because they know agents will increase the commission and the consumer will end up paying more. Simply put, Qld agents are earning less than most others throughout Australia and would love the opportunity to earn the equivalent of their counterparts.

And yes Harpic, I agree, if you feel you can receive a fairer result for you by negotiating a suitable commission structure why shouldn't you be able to. If an agent can prove to an owner why paying a higher commission with them rather than "Cheapskate Real Estate" down the road why shouldn't that option be available also. At the moment however, any bonus will have to be by an unidentified brown paper bag, as long as the agent is prepared to take the risk of losing their licence for it.

Kev

www.nundahrealestate.com.au

Thankyou Kev, I am learning a lot from this thread.

So what is a "fair price" for commission from an agent's viewpoint or generally?

When I sought advice about selling in the past, I was advised to negotiate with the agent..what is negiotiable? (esp in Qld if the agents are doing so badly there! ) Presumably advertising costs, as per initial posts on this thread, but what else?

Or is 5% to 18k and 2.5% thereafter a fair deal?

Harpic

Harpic said:

Thankyou Kev, I am learning a lot from this thread.

So what is a "fair price" for commission from an agent's viewpoint or generally?

When I sought advice about selling in the past, I was advised to negotiate with the agent..what is negiotiable? (esp in Qld if the agents are doing so badly there! ) Presumably advertising costs, as per initial posts on this thread, but what else?

Or is 5% to 18k and 2.5% thereafter a fair deal?

Harpic

Click to expand...

If you could get outstanding service, great communication and have your property properly marketed for less than the comm rate you mentioned than for you that would be a "fair deal" however reality is that will not happen. I haven't worked outside Brisbane but in our marketplace very very few agents negotiate the commission upfront and apart from the Jenman agents advertising is an expense normally paid for by the owner. ( With Jenman agents you pay also, just not upfront. THIS IS NOT A PRACTICE I RECOMMEND EVER. NEVER USE THE "PAY ON SALE" SYSTEM. Like everything if it sounds too good to be true, it probably is)

I would suggest to you, and others who may read this, don't focus on the costs ( Comm rate and advertising) but instead learn how to find out how capable the salesperson is. This can effect the sale price by tens of thousands of dollars, far more than .5% in comm or 1-2 grand in marketing costs. If the agent tells buyers the bottom line you will take, or that you have bought elsewhere and are desperate to sell you are potentially going to lose big time. Is the agent properly trained and by who, can they negotiate ( you will know this by how hard they fight for their commission) are they busy ( do they take open listings, if they do they let people waste their valuable time and probably accept playing mind games) how much experience do they have, do they live in the area, how many sales have they made recently.......the list goes on.

The problem is consumers don't take the time to fully understand the entire process of real estate. The perception is they have a licence, they have a business card they must be able to sell RE, and thats just not the fact. A RE office may have an exceptional salesperson performing brilliantly, consumers then ring that office because they see the company signs and end up listing with the dud who sits out the back reading a paper all day. Investors in this forum take hours and hours to get knowledge of the industry from an investing perspective yet rarely do I hear of someone taking the time to correctly evaluate the selection of the PM or salesperson they put the property in the hands of.

I could keep going for ages on this subject but I have probably made the point. What is a "Fair commission". The one that gets you the best possible NETT result. Note I said Nett.....Is it worth paying $500 or $1000 in marketing to potentially sell for $5000 or $10,000 more. I believe it is and I believe it is a reality that this happens most times when I sold a property. How do I know, well I have been a Qld silver and bronze award winner in sales for past 2 years yet EVERY listing I have had in that time has been a past client or a referral. All leads into the office are passed to my sales team.
I can only assume my clients are happy with what transpired during the sales process with me.

I'm glad Harpic you feel you are learning from this forum, that's what it is intended to do. I'm learning too, just like everyone else.

Have a great day.

Kev

www.nundahrealestate.com.au