Perth: Want to sell house. Have REA questions...

[Toads]

Hi guys,

Have a owner built home in the northern suburbs that has been previously appraised by the bank and 3 different agencies for market appraisal. The bank valued it at 850k whilst the REA came back with 880-899k appraisals.

In regards to commissioning, what is the most reasonable price to pay or negotiate?
Is a fixed rate better? If so, how much should I expect to pay?

I am aware that I would need to provide indemnity insurance as the house is less than 3 years old.

The REA we like to sell our home are 2 older men that work together. Would this limit me in negotiations for a lower commission rate or anything else I need to consider??

Can I negotiate what advertising is placed on the property?
For example, I don't want a street sign (not much traffic), I only want to list on realestate.com.au and domain.(92% of buyers use these sites). I don't want any useless magazine print outs and flyers etc.

cheers

 

[INVSTOR]

What suburb? I saw about 8-10 agents when selling my property recently. Some were negotiable with fees, some weren't. I paid fixed rate rather than percentage. $11,000 plus about $600 advertising. Was $5000 cheaper than most others although got one cheaper quote for around $11,000.

 

[westminster]

Perth REAs generally charge around 2.5% and that sometimes does or doesn't include advertising.

You get to choose what advertising you want. Generally most people go for the online RE and maybe some local flyer drop but that's about it.

 

[Toads]

2.5% is a fair wallop of dough REA will get for a sale such as my property! I've been trying to justify that commission rate but finding it hard to be honest!
I would think 1.7-2% more reasonable. Depending on final outcome.

The REAs work for a prominent agency in Perth, so I'm not sure what they might say if I try negotiate fixed rate. Is it depending on company or subject to the REA?

 

[westminster]

2.5% is a fair wallop of dough REA will get for a sale such as my property! I've been trying to justify that commission rate but finding it hard to be honest!
I would think 1.7-2% more reasonable. Depending on final outcome.

The REAs work for a prominent agency in Perth, so I'm not sure what they might say if I try negotiate fixed rate. Is it depending on company or subject to the REA?

Really you should just ask. No one knows for sure until then.

Some discount more than others.

 

[sanj]

2.5% is a fair wallop of dough REA will get for a sale such as my property! I've been trying to justify that commission rate but finding it hard to be honest!
I would think 1.7-2% more reasonable. Depending on final outcome.

The REAs work for a prominent agency in Perth, so I'm not sure what they might say if I try negotiate fixed rate. Is it depending on company or subject to the REA?

What did they say when you spoke to them? I have paid everything from around 1.7% up to 2.75 including gst

Pretty much all your questions can be answered by speaking to the agents, no point speculating.

I will also add that the right agent is worth paying a bit extra for, provided you can identify who the right agent is of course

 

[pinkboy]

Dont get 'fair' and 'reality' mixed up.

pinkboy

 

[Toads]

I have a meeting this week with them to discuss the t&c before I sign anything.
I just wanted to do some prep work so I can have something to stand on.
It's the first time I'm selling a house.

I agree that some agents are worth more than others, however I don't quite agree on commission rates. I'd prefer a fixed rate inclusive of advertising and gst.

 

[thatbum]

I agree that some agents are worth more than others, however I don't quite agree on commission rates. I'd prefer a fixed rate inclusive of advertising and gst.

Why? The difference here seems like it would be negligible.

 

[Blacky]

2.5% is a fair wallop of dough REA will get for a sale such as my property! I've been trying to justify that commission rate but finding it hard to be honest!
I would think 1.7-2% more reasonable. Depending on final outcome.

What are you basing this on? Or is it just that you feel 'cheated' by paying $10k++

If its such easy money - why not try to sell it yourself, and see how you get on. :roll eyes:

Don't forget if you negotiate a fixed rate, there is little/no incentive for the REA to try and negotiate the price upwards...

Blacky

 

[sanj]

I have a meeting this week with them to discuss the t&c before I sign anything.
I just wanted to do some prep work so I can have something to stand on.
It's the first time I'm selling a house.

I agree that some agents are worth more than others, however I don't quite agree on commission rates. I'd prefer a fixed rate inclusive of advertising and gst.

Sounds like you've had 3 appraisals done, what were the fees suggested by those agents?

Feel free to prefer a fixed rate inclusive of advertising but understand that the agent may then do the minimum instead of the ideal, eg regular re.com ads instead of highlight property, which is sometimes the appropriate option

 

[Toads]

Dont get 'fair' and 'reality' mixed up.

pinkboy

What are you basing this on? Or is it just that you feel 'cheated' by paying $10k++

If its such easy money - why not try to sell it yourself, and see how you get on. :roll eyes:

Don't forget if you negotiate a fixed rate, there is little/no incentive for the REA to try and negotiate the price upwards...

Blacky

Based on from what I've read on various forums. I'm trying to find what more I can get for my dollar by negotiating a lower fixed vs 2.5% commission ( 20k approx).
I agree with you that they might not want to try harder for you since there is nothing much more in it for them, so I may just have to stick to this plan.

 

[westminster]

Did the REAs not tell you what they charge when they did appraisal? And what was included in that amount?

I'm sure they would have told you and I'm sure not all of them are 2.5%

 

[Toads]

Ofcourse they told me, however I'm now at the point where I need to choose an agency to sell my house and possibly try negotiate terms.

 

[sanj]

So negotiate then, what's holding you back? Some agents are more flexible than others, no one here is going to be able to tell you what they will and won't agree to.

 

[perthguy]

Ofcourse they told me, however I'm now at the point where I need to choose an agency to sell my house and possibly try negotiate terms.

You could always offer them $x if they sell it for $850,000 with a bonus of $x for every $5,000 over that. It ends up being like a % commission though.

I went through the same thing when I sold my place and ended up hiring one of the more expensive agents. He ended up selling it for more than I wanted and his higher commission was less than the additional amount he sold the place for. I wound up ahead. I think it is unlikely that some of the cheaper agents would have got such a high offer. That is something to consider too.

 

[Big Will]

REA commission is up to each agency and their rate. You do get what you pay for and if someone is going to drop their commission are they going to drop on your price?

Not knowing Perth rates or where it is located (might be a slower sale, which means it will require more work, equals more commission).

You can get creative and say 2% up until 890k (or whatever figure) and then 5% for anything above and even 10% above 900k. You will need to work out what you want and if none of them are saying 900k then you might want to make a real nice incentive to get above the magical 900k. Can you imagine how hard the agent would work getting if he was able to get that accelerator at 10%, boy yes you might go that is stupid amount of money but I would gladly pay him 1,000 for every 10,000 as all the REA didn't think we would get above 900,000 and really I am getting 9,000 as a bonus

Using a fixed rate (e.g. 20k) means there isn't any incentive besides word of mouth. if you are wanting to only pay 20k in commission then why not work it backwards to a % for example on an 890k sale at 2% + GST = 17,800 + GST = $19,580 then you have an incentive for them.

Regarding advertising it is up to you to choose what you want to spend your money on. I would always get a sign board even if it is generic one as one your neighbor might have someone looking at moving in the area, someone got lost and was looking at buying a property, it makes it easy for buyers to identify your property and the REA is able to put up inspection times. I would also get professional photos, floorplan and a nice internet package. I am not sold myself on magazines as they are costly in terms of bang for buck. However if I was selling an downsizer or retirement home then yes I would need to consider it because of my target market.

 

[vaughan]

... It's the first time I'm selling a house.

Yeah, I guessed that.

Here's a thought, try this:

1) Get an agent around for an appraisal so you know what it might sell for.
2) phone up everybody you know and ask them to make an offer for your house.
3) If one of your friends offers more, sell it to them. Otherwise, pay the agent to do their job.

 

[Toads]

Excellent post thanks big will.

 

[Big Will]

No worries good luck and if you want to update us that would be great