Agent Fee payable?

[HotRod]

Father-in-law is selling his property through his second agent (listed for $975K to $995K after being originally listed for $1.07M through original agent).

He received an offer today, from the original agent through a third, conjuncting agent for $925K. The conjuncting agent got the offer raised to $935K. The agent's selling fee is 3%+GST.

Have rung REIWA and they said that thee is no issue with this and full fees can apply.

I call bull and think that the very least there should be no agent's fee payable and the very most no more than 1 to 1.5%++.

Plus, given that the original agent is making the offer he has inside knowledge as to the bottom dollar my FIL was willing to take originally.

He is keen to sell as this is the first real offer he has had and I think the buyer knows this and will use it to his advantage.

FYI, the house is an original chracter 3x1 in Mt Lawley on a 605m2 two street frontage that can be subdivided (R40 zoning I think).

http://www.realestateview.com.au/Real-Estate/65-forrest-mount-lawley/Property-Details-buy-residential-3998383.html

Interested on other's views.

Mine, don't take anything less than the $975K and the agent's fee no more than 1%++. Damn cheeky of the orginal agent making such a low ball offer.

 

[mitchellp]

all depends on your written agreement betweent the rea and your father...

 

[pennyk]

If you've had no offers at the higher price, then the property isnt really worth as much as you think, at the moment. If you cn wait, I woud take it off the market and do some improvements and then put it back on.

at this stage, you would most probably have 3 agents with a claim on a commission. I dont understandwhy agent 3 has worked with agent 1, but it has created a mess. you might need to add a clause in the contract that the buyer pays any additional commission. While is might sound unfair, you do seem to have gotten yourself into an awkward situation, and it could be very costly. When we were in a similar situatio, we asked agent 1 to give a list of contacts to agent 2, so they were aware of who had already inspected the house. it may seem improbableto you, but there are plenty of agents who have demanded ther commissio be paid, and unless you plan for that scenario, you will bepaying out of yur pocket.

 

[HotRod]

Not my deal, my FIL's.

Just got a bad feeling about this.

The original REA knows way more than any other buyer should know. It might be legal, but not sure if ethical.

 

[pennyk]

you should get a solicitor involved before accepting the offer

 

[HotRod]

All moot now.

Just found out he accepted $945K with a reduced agent's fee which I believe is about 2.25%. Also, the property currently listed at $970K, not the $975K to $995K.

So the net position of $945K at the reduced agent's fee works out about the same as $952K at full agent's fee.