Real Estage Agent bonus fee

[Garry K]

I
Back to the block....No rental return + no deductions on interest payments = no interest from investors = even less interest from agents who were flat out flogging anything that didnt move. (i paid cash)

I couldnt even get the agents to return my calls from the number on the dilapidated sign so i tracked down the owner and bought it privately for a great price, luckily for me it was a distressed sale and he needed to offload it.

I have been deciding on and off since then to put a house on it but i decided to sell it privately recently and should exchange contracts tomorrow. Gross gain of 256% in a couple of years.

btw: dont ya hate that NSW exit tax

Excellent work LW

Just goes to demonstrate there are "investment" properties of many types.

And many of us would have been too focussed on finding that cash flow+/capital growth + "house" to even notice it.

GarryK

 

[Peter 14.7]

I have to agree with Jamie.

We've occasionally been offered these types of 'incentives' and have always thanked them for the offer but refused to accept.

I can speak for the four salespeople in our office when i say, it doesn't matter if its a block of land with a $1000 commission (prior to 2003) or a house where we'd get a $12,000 commission, we would be doing everything we can to sell it.

To accept a bonus would be sending a message saying that we weren't trying to do our best if the bonus wasn't offered, and 99% of the time they're not offered!

Cheers

Good Point Sultan and something we can use in reply.

I would like to add though an experience I use to have when I sold large commercial property for the NSW Gov.

Now commercial is different but the gist is say 4 agents say it was worth $2.5to $3M and commission are usually the same at 1%. The decision is therefore expertise and market coverage.

But sometimes one would say he/she could definitely get $3.5M+ if we listed. But he wanted 1.25% for every dollar over say $3M. Yeah right: rolleyes:

So I would say ok. If the best all of the others reckon is $3M and your so confident you can get $3.5M+ that’s great.

So commission will be this….. 0.8% up to $3M and 1.25% for every dollar over $3M.

The structure would be so if agent delivered on his promise they got a bonus, and all was fair. If not they got less commission o/a and had essentially bought the job.

Some went that not fair!

Some said, you’re on!

It helped to sort out the BS from those Genuine.

FYI, Peter 147

 

[crest133]

Hi All
Getting warm in here.
I had success with a major REA selling a property for me.
We agreed on a selling price, 2.5% commission.
If the agreed price was reached, salesman got $500 personal thank you in his pocket, nothiong to do with the agency. Hey, it's a free country.
If the agent slid backwards by $10K, the commission reduced to 2%.
There was a definate incentive not to let the price slide on me.
The salesman worked very hard, held my price, scored his $500, and told me he was very mindful during the selling process of using all his selling skills to hold my price, and to get the extra $500 tip. Incentive works for me.
That's been my experience, hope it helps.
cheers
crest133

 

[XBenX]

Thanks for sharing Crest - Ive heard a lot of people talk about using this strategy - yet not heard of anyone using it successfully.

 

[House_Keeper]

So commission will be this….. 0.8% up to $3M and 1.25% for every dollar over $3M.

The structure would be so if agent delivered on his promise they got a bonus, and all was fair. If not they got less commission o/a and had essentially bought the job.

It helped to sort out the BS from those Genuine.

FYI, Peter 147

Thanks for your input Peter.

The way you have structured this seem well balanced.

I am of the opinion this type of commission scale would be very helpful in filtering out the agents who can't deliver, as the agent who accepts such a scale would be the one who know they can produce results. An agent who is mostly focused and skilled at selling a property quicky would not be interested in such a commission scale.

I haven't tried it in practice yet but I will on my next sale.

Cheers,

 

[House_Keeper]

If the agreed price was reached, salesman got $500 personal thank you in his pocket, nothiong to do with the agency.
crest133

Thanks for sharing this great strategy crest.

Was that $500 personal bonus documented in the selling agreement? What the agency aware of this? I am wondering how well this would be accepted with the agency...

Thanks,

 

[Sultan of Swing]

If the agreed price was reached, salesman got $500 personal thank you in his pocket, nothiong to do with the agency. Hey, it's a free country.
If the agent slid backwards by $10K, the commission reduced to 2%.
There was a definate incentive not to let the price slide on me.
The salesman worked very hard, held my price, scored his $500, and told me he was very mindful during the selling process of using all his selling skills to hold my price, and to get the extra $500 tip. Incentive works for me.

Was that $500 personal bonus documented in the selling agreement? What the agency aware of this? I am wondering how well this would be accepted with the agency...

I know that if i took a 'bribe' like that and the agency found out I'd be out of a job real quick.

 

[Jag]

Kind of leaves you asking about the morales of an agent that will take an "under the counter" fee....

 

[Kevin Hockey]

As a salesperson I was offered "under the counter" money a few times, refused every time. The first time the guy ended up in jail for fraud, of over 6mil.

This comm structure wouldn't work in Qld as we are regulated with our commissions but I have heard of it in the southern states. If you are going to use this structure, and I would think it has merit, I would be sure to have an independent valuer give you an estimate so you can be sure the agent's original appraisal is accurate.

Kev

www.nundahrealestate.com.au