Agent's Commission

Hi there,

We are looking at selling our PPOR (in Sydney 'burbs 21km from CBD) and met with a REA today who gave us an estimated value range of $720K - $750K and detailed his commission, GST etc. We are looking at selling at auction which is pretty common for the area and market at present.

REA commission is a flat 1.7% plus of course marketing, auctioneer fee etc. When we started doing the sums we worked out that the difference in commission between a sale at $720K versus $750K is only $510 - it made us start to consider whether he will really push that hard to get that higher price for an extra five hundred bucks in his hand, even though it means a lot more in the hand for us.

We were thinking of incentivising him a bit more.. for example if he achieves equal to or over $750K then we will give him an extra $5K commission. We think $750K is achievable with effort, though it's at the upper end of his estimate.

Have any of you done this before or used a similar strategy that you can share?

Thank you
vtt
:D
 
'Kicker' fees are becoming popular - for eg 1.7% of the price up to $720k and then 5% on any amount past $720k.

Therefore on $720k they would get $12,240 but if they hit $750,000 it's an extra $1500. You're better off offering a % above a certain figure rather than a fixed sum if they reach a certain point.
 
All commission fees are negotiable, if you want to put kickers in then go ahead. You can even reduce the base commission and make a rather larger kicker it is negotiable.
 
Hi there,

We are looking at selling our PPOR (in Sydney 'burbs 21km from CBD) and met with a REA today who gave us an estimated value range of $720K - $750K and detailed his commission, GST etc. We are looking at selling at auction which is pretty common for the area and market at present.

REA commission is a flat 1.7% plus of course marketing, auctioneer fee etc. When we started doing the sums we worked out that the difference in commission between a sale at $720K versus $750K is only $510 - it made us start to consider whether he will really push that hard to get that higher price for an extra five hundred bucks in his hand, even though it means a lot more in the hand for us.

We were thinking of incentivising him a bit more.. for example if he achieves equal to or over $750K then we will give him an extra $5K commission. We think $750K is achievable with effort, though it's at the upper end of his estimate.

Have any of you done this before or used a similar strategy that you can share?

Thank you
vtt
:D
We have done that a few times - flat commish up to a certain dollar amount, and then a bigger jump for any amount over and above this figure.
 
I was dealing with an asian agent once, last time ever

I wanted to offer him a sliding scale, and offered him the standard rate up to a certain price and then a far bigger cut higher,

he then said ok, above a certain price, he keeps all of it !!!

I laughed my head off
 
I like the idea of a base comm up to a certain $ then a kicker for above. Makes it a win-win

It does but you should also know what your property is worth (which everyone here should know roughly). For someone that doesn't know how to do this then it can be dangerous.
 
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