Property Marketing Companies

[starter]

Was wondering if anyone has any information on how the property marketing companies are set up and their typical commission rates.

For example, whether those companies marketing OTP properties are required to have any licence/registration? I assume that they're not required to be licenced as REA, so do they just put the buyer directly in contact with the developer and take an introduction commission?

Any help would be greatly appreciated. I'm looking at (very early stage) a niche market where there may be fair demand for OTP.

 

[tobe]

2 to 5% comm isnt uncommon, but it can get to 10 to 20% for out of town muggles. Good luck with your new venture.....

 

[starter]

2 to 5% comm isnt uncommon, but it can get to 10 to 20% for out of town muggles. Good luck with your new venture.....

Thanks tobe. 10-20%! Wow, that's so high.

When you say out of town muggles I assume you mean if a company can get unsophisicated people to pay a higher price then commission will accordingly be higher, rather than any prejidice against those without magical powers (HP joke)? Not really, what I want to be doing but good info to know.

Any idea on licensing?

 

[vaughan]

Thanks tobe. 10-20%! Wow, that's so high.

When you say out of town muggles I assume you mean if a company can get unsophisicated people to pay a higher price then commission will accordingly be higher, rather than any prejidice against those without magical powers (HP joke)? Not really, what I want to be doing but good info to know.

Any idea on licensing?

Not necessarily unsophisticated, just un-informed.

For example, in Sydney a 2 bed apartment might be $500,000. If I offered a Sydney person a 2 bed apartment in another city for, say, $350,000 then it'd appear to be Unbeatable Value. However, in that city, 2 bed apartments might only be worth $300,000. So the Sydney person thinks they are getting a bargain but are really over-paying.

It pays to know the market.

 

[tobe]

Id say it would be diferent in each state, but for victoria, for builders, and I think for OTP as well there isnt the same licencing requirements as for established estate agents.

Ive heard the estate agents licence isnt that dificult to attain, why dont you do it anyway and be ahead of your competition?

 

[tobe]

and by the way, Im not condoning such commissions. Anything over 2% or so is just plain wrong and hurts the industry.

 

[starter]

Id say it would be diferent in each state, but for victoria, for builders, and I think for OTP as well there isnt the same licencing requirements as for established estate agents.

Ive heard the estate agents licence isnt that dificult to attain, why dont you do it anyway and be ahead of your competition?

I think it's an actual course so if I can avoid it I wouldn't mind as I'm actually living overseas currently (hence the niche market that I'm looking at). Just trying to get to the bottom of what's required and then make a decision from there whether it's worthwhile pursuing.

 

[starter]

Not necessarily unsophisticated, just un-informed.

For example, in Sydney a 2 bed apartment might be $500,000. If I offered a Sydney person a 2 bed apartment in another city for, say, $350,000 then it'd appear to be Unbeatable Value. However, in that city, 2 bed apartments might only be worth $300,000. So the Sydney person thinks they are getting a bargain but are really over-paying.

It pays to know the market.

Tomato, tomato.

 

[Redwood]

Was wondering if anyone has any information on how the property marketing companies are set up and their typical commission rates.

For example, whether those companies marketing OTP properties are required to have any licence/registration? I assume that they're not required to be licenced as REA, so do they just put the buyer directly in contact with the developer and take an introduction commission?

Any help would be greatly appreciated. I'm looking at (very early stage) a niche market where there may be fair demand for OTP.

Depending on the area commission varies, with H&L can be between 3-5% depending on the builders and 'location', i.e if remote, they will pay higher.

For OTP Apt, again, depends where and how they are marketed and priced. Alot of the inner city apartments are marketed direct to China/ Malaysia, and commissions vary for local 'agents', sales comms can be between 4-6% depending on the developer and location. If they are paying 6% its usually overpriced and they need to sell. Usually 50% paid up fromt and 50% on settlement.

Do note, I know a number of agents that have been screwed on the settlement payment, so do your due diligence on your network.

For me, integrity is key.