Commission
- Thread starter Success
- Start date
how much are they worth?
that is a fair figure, anything over 2% would be excessive
Are there marketing costs?
I'll do it for 1% + GST but I have no idea what area your in.
The really active agents selling a lot of stock generally dont need to discount their rate much or at all. The agents that discount their rate heavily generally do so for a reason....becasue they cant get any business at normal rates.
Rather than chasing a .25% or .5% discount why not chase the most active agent or the one thats acheiving the best results for their vendors. I dare say it would pay you ten fold.
To answer your question 1.75% + GST is a reasonably cheap fee.....for the area I work in anyway.
The really active agents selling a lot of stock generally dont need to discount their rate much or at all. The agents that discount their rate heavily generally do so for a reason....becasue they cant get any business at normal rates.
Rather than chasing a .25% or .5% discount why not chase the most active agent or the one thats acheiving the best results for their vendors. I dare say it would pay you ten fold.
To answer your question 1.75% + GST is a reasonably cheap fee.....for the area I work in anyway.
Yes. Marketing costs are in addition to this.
with that sort of commission find yourself an agent that will deal..
anyone that pays for a bit of marketing, newspapers adds when they are outlaying so much in commission is a total mug...
agents bung on this garbage so marketing costs do not eat into their bottom line..
find a decent agent who is reasonable or get ripped blind with marketing costs...
if you dont, more fool you....
cheers and best of luck..
anyone that pays for a bit of marketing, newspapers adds when they are outlaying so much in commission is a total mug...
agents bung on this garbage so marketing costs do not eat into their bottom line..
find a decent agent who is reasonable or get ripped blind with marketing costs...
if you dont, more fool you....
cheers and best of luck..
Hi Success
Having the right Agent, and having the right marketing strategy and right budget, is intrinsic to the success of the sales campaign
Of course, as csc2 seems to be promoting, you could do as this Vendor did:
http://www.somersoft.com/forums/showthread.php?p=742352#post742352
starter relates his experience as a buyer:
We found this place that seemed to have slipped through the cracks, also advertised poorly and had been on the market for a while (only 1 photo up on Domain and no floorplan, vendor wanted to save costs). From original asking price of 720k in May, we bought it for 660k with 90 days settlement
Sounds like a great idea to insist that the Agent pay for the most skimpy advertising possible - in the above example, a cheap campaign cost the vendor $60,000.
However, it is not the budget. It is the skill of the Agent and their sales promotion department which will win the day.
As shady suggested, it is perhaps more important to engage the most active agent or the one that's achieving the best results for their vendors.
Interestingly, in Freakonomics, American sales date reveals then when Agents sell their own homes, the property stays on the market something like ten days longer and achieves, on average, a 3% (or thereabouts) higher price than the Agent's vendors realise on their sales.
If this also applies in the Australian market (and I see no reason why not) then the importance of a well run campaign with the property receiving wide spread and appropriate promotion would probably yield you the best results.
In Melbourne, we tend towards Auctions (depending on the property and on the area) with marketing campaigns generally running for six weeks prior to the date.
This ensures that the vendor has the property in it's best condition, offers plenty of opportunity for people to inspect and for the Agent to create as much interest in the property as possible. Auctions also set a deadline with a clear indication that the vendor intends to sell on the day
Even if your area is not generally an Auction hot spot, having a campaign with an advertised 'end date' can bring focus to the process and ensure that the Agent has plenty of incentives to offer and prompt prospective buyers.
At the end of the day, I would expect to pay a higher commission rate for the lower value property, and a lower rate for the higher value property, plus anything up to 1% for the advertising campaign. And I would expect that the campaign run its full course - I would want that extra 3% for being on the market a bit longer!
Hope this helps
Kristine
Having the right Agent, and having the right marketing strategy and right budget, is intrinsic to the success of the sales campaign
Of course, as csc2 seems to be promoting, you could do as this Vendor did:
http://www.somersoft.com/forums/showthread.php?p=742352#post742352
starter relates his experience as a buyer:
We found this place that seemed to have slipped through the cracks, also advertised poorly and had been on the market for a while (only 1 photo up on Domain and no floorplan, vendor wanted to save costs). From original asking price of 720k in May, we bought it for 660k with 90 days settlement
Sounds like a great idea to insist that the Agent pay for the most skimpy advertising possible - in the above example, a cheap campaign cost the vendor $60,000.
However, it is not the budget. It is the skill of the Agent and their sales promotion department which will win the day.
As shady suggested, it is perhaps more important to engage the most active agent or the one that's achieving the best results for their vendors.
Interestingly, in Freakonomics, American sales date reveals then when Agents sell their own homes, the property stays on the market something like ten days longer and achieves, on average, a 3% (or thereabouts) higher price than the Agent's vendors realise on their sales.
If this also applies in the Australian market (and I see no reason why not) then the importance of a well run campaign with the property receiving wide spread and appropriate promotion would probably yield you the best results.
In Melbourne, we tend towards Auctions (depending on the property and on the area) with marketing campaigns generally running for six weeks prior to the date.
This ensures that the vendor has the property in it's best condition, offers plenty of opportunity for people to inspect and for the Agent to create as much interest in the property as possible. Auctions also set a deadline with a clear indication that the vendor intends to sell on the day
Even if your area is not generally an Auction hot spot, having a campaign with an advertised 'end date' can bring focus to the process and ensure that the Agent has plenty of incentives to offer and prompt prospective buyers.
At the end of the day, I would expect to pay a higher commission rate for the lower value property, and a lower rate for the higher value property, plus anything up to 1% for the advertising campaign. And I would expect that the campaign run its full course - I would want that extra 3% for being on the market a bit longer!
Hope this helps
Kristine
...and since your going into bat for the agent why not put a balanced approach and nominate the hundreds, no thousands of dud agents that overcharge sellers for so called quality marketing campaigns yet do not produce results..
marketing of a property is all well and good but since when does the cost of marketing separate to commission.
Marketing costs etc should come out of an agents commission...its that simple..
what exavtly other than time does an agent outlay when selling?
any mug can produce a marketing campaign.....its not rocket science to make something look good out of a sours ear..
If an agent is worth is salt in person to person contact he will sell the property with little additional cost..
People over the past 10-20 years have been coached by the real estate industry to pay additional for advertising and marketing................
there is no law that says sellers must pay separately that i know.
its what people are bassically "conned" intop so the agent can reap his full commission and not have advertising fees taken from commission...
the real benefit is for the agent, nothing more.
i think this website sums up real estate marketing perfectly.
i couldn't write about the issue better myself.
people are now conditioned to pay for advertising but as i have said previously that is a total sham and fees for advertising should come from commissions.
http://www.jenman.com.au/BS_Advertising.php
i couldn't write about the issue better myself.
people are now conditioned to pay for advertising but as i have said previously that is a total sham and fees for advertising should come from commissions.
http://www.jenman.com.au/BS_Advertising.php
I don't understand your logic. If it's because you think that agents earn too much in commission, then that's an argument for negotiating lower commission, but I don't think it's an argument for commission being all-inclusive.
If the vendors' and agents' interests completely coincided, I'd agree with you, but the difference in commission between a low and high sale price is substantial to the vendor but of little significance to the agent. Therefore, by paying an inclusive price, you motivate the agent to pay for the absolute minimum marketing necessary to generate an offer, whereas the vendor wants marketing which will generate the best possible offer.
Imagine this simple scenario, where an agent is on 2% commission. Let's say that placing a $2,000 ad would generate an increased sale price of $25,000. (I know that you can't know so precisely, but let's assume for the purposes of demonstration that we do!) Would you want to do it?
As a vendor, I make a profit of $17,500 ($20,000 - $2,000 ad cost - $500 extra commission) by paying for such an ad. I'm pretty sure most of us, as vendors, would want that ad placed!
But from the agent's perspective, he outlays $2,000 to make an additional $500, ie a loss of $1,500, and thus he wouldn't place such an ad.
By paying an inclusive price, you've created a scenario where your agent's best interests run counter to your own, which is never a good idea. If you think your agent's charging too much in commission, feel free to negotiate it, but by asking them to include marketing, you're effectively asking for them to discount their commission by an amount which they control, and in doing so, motivating them to act contrary to your interests.
All you have to do is a 1 week short course in TAFE and you can become a 'pro' as well.
