Real estate agent commissions & fees

[stevie_sloth]

So...in QLD it is standard for the first $18,000 to be charged at 5% and the remaining amount charged at 2.5%. Plus GST. *groan*

Is this commonly IN ADDITION to paying separately for advertising costs and professional photographer? Or should that commission just be for everything? And you pay nothing until the property sells?

 

[wylie]

That is right. If I was selling I would go with re.com and the local paper, cheap as I can get away with. I wouldn't bother with the Saturday or Sunday papers (but that's just my opinion).

Don't pay to have the agency splash their logo on any adverts. You just need the suburb and their phone number in small print at the end. No big headings.

I'm guessing 80% of your "audience" will be on re.com in Queensland.

I've never negotiated on commission, but perhaps with things being as they are on the gold coast, you could give that a try. But you do want your agent to work for you, and it might make then think "why should I try to get any more" if you try to get them to discount the commission. I have no idea, but food for thought.

Or maybe go with one of the fixed limit agents, if they still exist.

 

[vaughan]

It's whatever you negotiate and agree to.

The advertising and photography costs are incurred up front, and the agent only gets their commission if the property sells, so (if I were an agent) I'd be charging the vendor those fees separately and up-front.

Regarding paying nothing unless the property sells: what if you (as vendor) are unrealistic, want too much and choose not to sell at the market price? Should the agent be out of pocket for that?

 

[jaycee]

It's whatever you negotiate and agree to.

The advertising and photography costs are incurred up front, and the agent only gets their commission if the property sells, so (if I were an agent) I'd be charging the vendor those fees separately and up-front.

Regarding paying nothing unless the property sells: what if you (as vendor) are unrealistic, want too much and choose not to sell at the market price?Should the agent be out of pocket for that?

Yes

The agent needs to decide if it's worth taking on and only take on if he/she things they can make money from it, otherwise they should say "thanks but not thanks", just like we consumers do when offered something to buy for too expensive a price - no agent is forced buy a vendor to take on a job that they will lose money on.

 

[vaughan]

Jaycee, are you suggesting that the agent should pay the advertising fees out of their own pocket? Or does your "Yes" mean you agree with what I was suggesting (that the vendor should pay these costs)?

 

[Andrew_A]

So...in QLD it is standard for the first $18,000 to be charged at 5% and the remaining amount charged at 2.5%. Plus GST. *groan*

Is this commonly IN ADDITION to paying separately for advertising costs and professional photographer? Or should that commission just be for everything? And you pay nothing until the property sells?

That's standard and also the maximum allowable until they deregulate commission structures in QLD.

I'm sure you can do wonderful things negotiating agent commissions lower on the coast at the moment, how much you should discount or do it yourself is another question.

 

[jaycee]

Jaycee, are you suggesting that the agent should pay the advertising fees out of their own pocket? Or does your "Yes" mean you agree with what I was suggesting (that the vendor should pay these costs)?

The agent should make an offer to the vendor. Whos shoudl compare it to other offers and choose which they think is best for them

It does appear that many properties have been sold and the vendor has paid for no advertising and only paid for comission

How a particular agent works out how to acheive what he wants to acheive from a potential sale, whilst making enough profit to stay in a job or in business, is up to him/her, not me.

If 1 agent is mor expensive than aonther quote I receive & I truly consider both to be as good as each other, whose quote do you think I should take - the more expensive one for no reason ?

 

[wylie]

If 1 agent is mor expensive than aonther quote I receive & I truly consider both to be as good as each other, whose quote do you think I shoudl take - the more expensive one for no reason ?

If you have an agent who is only going to receive 1% commission from the sale of your house because you have talked him down on his commission, or 2% commission on your neighbour's house, which house do you think he will try to sell with more conviction .

 

[jaycee]

If you have an agent who is only going to receive 1% commission from the sale of your house because you have talked him down on his commission, or 2% commission on your neighbour's house, which house do you think he will try to sell with more conviction .

No. Did i suggest anything quite so dramatic ? I don't believe I did. I didn't think I mentioned / suggested negotiating the agent's commission down at all.

I have mentioned, in the past though, that if I think someone is that much overpriced that I wouldn't try to negotiate down e.g. 50% as per your example, I would just not use their services or buy what they are selling.

If I was unfmailiar with pricing for the service I was looking for, I guess I would get a couple of quotes/rough prices first to try & work out what I figured was "fair price" or whatever in the market.... and go from there.....

Is that wrong ?

 

[wylie]

You don't "get quotes" for commission. It is a standard percentage of the sale price (in Queensland anyway). I realise you "could" ask the agent to reduce the commission, but I would think that would pi$$ the agent off enough to perhaps not make too much effort. I'm sure he would put more effort into selling the house that he is making full commission on.

Having said that, on two occasions we have had agents offer to give up a little of their commission when negotiations have stalled and the vendor and purchaser are only a couple of thousand apart. The agents involved were happy to give up a little to gain a lot.

Once it happened and my parents settled with the agent giving up some commission, and the other time it was offered but not needed in the end, as the contract came together.

 

[wobbycarly]

A Qld agent I've dealt with had a "special" on where he was simply charging a flat rate ($5000, or $7000, can't exactly remember). Whatever the number was, it was going to be $2-3k less than the "standard" commission structure. All advertising/marketing came out of this, too.

Given that we were just testing the waters - and we told him this clearly - when the property didn't sell after 2 months, we simply took it off the market. Didn't cost us anything.

So agents can and will negotiate.

 

[wylie]

I know they "can" and "do" but it seems that in the other states this is something that is "normal". It just isn't in Brisbane and I wouldn't think it would be on the coast either, but perhaps with the market being so poor, they are fighting each other and willing to drop the rate just to get the business.

Unless it is Go Gecko, who have a flat rate fee. I'm not sure how they are going, but it would be worth a try.

 

[stevie_sloth]

Well, we are now putting our property on the market, and here is what we are paying to do so through an agent (who we like and think is good)...

- Standard QLD commission of 5% on $18,000 and 2.5% for the remainder of the sale price, plus GST.

- Advertising, including the listing on real estate.com.au, professional photographer, a horizontal board out the front of our property with pictures, inclusion in the real estate's own brochure booklet of properties, video tour online, interactive floorplan online, 200 handouts in mailboxes locally, various other things (all of this is for 4 weeks, leading up to the auction). All this is $1,200.

- Auction fee - $450. (of course, if it doesn't end up going to auction cause it sells first - WE WISH! - we won't pay this cost)

- Newspaper fees - $2,200 (this is for ONE small ad once per week for 4 weeks in the Gold Coast Bulletin Saturday property guide, and another widely distributed Gold Coast property glossy magazine.) The agent said if our place has not sold by the end of the 4 weeks, he would pay for a further 2 weeks (our exclusive agent contract is for 6 weeks) at no cost to us. Also of course, if we manage to sell before the entire 4 weeks campaign is up, we won't pay for any newspaper advertising we don't use.

Although, the initial cost was actually TWICE that. It was $1,100 for a slightly larger ad in the paper each weekend x 4. We could NOT afford that, no way. So we asked if we could only put one in every 2nd week instead of weekly, but apparently you can't do that. So the agent called the paper contact and arranged for a slightly smaller ad, at half the price.

So...yep.

 

[wylie]

Why not just put it on the market with a price, a little higher than you want to get to allow for some negoation.

Get it on realestate.com for nothing (or for very little?) and see what happens.

I wouldn't be paying those costs. I think that is waaaaaay overkill if the place is priced right.

 

[stevie_sloth]

This is what people pay for real estate agent advertising, isn't it? People seem to think it is. The majority is just this newspaper thing. I can't believe how expensive that is.

Places listed for private sale around here take an average of 180 days to sell. 6 MONTHS? At least if we have an auction, we will know (we hope) how much interest there is.

A lot of properties around here just do not sell. They sit and sit forever. They sometimes start out way too high in price (like $390,000 in an area where things are selling for $300,000 after several months of being at a lower price of $325,000 to begin with)...

If it doesn't sell at auction, we will scale back to just realestate.com.au and the board out the front. No newspaper.

 

[jaycee]

Why not just put it on the market with a price, a little higher than you want to get to allow for some negoation.

Get it on realestate.com for nothing (or for very little?) and see what happens.
I wouldn't be paying those costs. I think that is waaaaaay overkill if the place is priced right.

This is all I was suggesting - that paying extra for thing is not always necessary.

 

[wylie]

Could I suggest you don't sign up to anything until you think this over. This is money you just cannot afford to spend, especially if it is not necessary.

Board out front, professional photography and listing on realestate.com is about all I would be doing. If it is priced right, it will sell without the expensive realestate adverts in the local rag.

I'll bet the agency name will be nice and big. YOU are paying for that.

Auction? Why? People go to auctions for "landmark" properties because they really want that particular house. Run of the mill, dime a dozen properties (and I don't say that to offend you) don't need to be auctioned. People at the action for your place will most likely be there to pick it up cheaply.

Many will not even consider an auction property due to financing issues.

Please tell us you haven't signed up to this yet?

 

[stevie_sloth]

Could I suggest you don't sign up to anything until you think this over. This is money you just cannot afford to spend, especially if it is not necessary.

Board out front, professional photography and listing on realestate.com is about all I would be doing. If it is priced right, it will sell without the expensive realestate adverts in the local rag.

I'll bet the agency name will be nice and big. YOU are paying for that.

Auction? Why? People go to auctions for "landmark" properties because they really want that particular house. Run of the mill, dime a dozen properties (and I don't say that to offend you) don't need to be auctioned. People at the action for your place will most likely be there to pick it up cheaply.

Many will not even consider an auction property due to financing issues.

Please tell us you haven't signed up to this yet?

Yeah, we've signed up for it. *sigh*

At least the board thing has the company's name in small print, not big.

 

[wylie]

Don't just "sigh". See if you can get out of it. It just seems such a waste of money, that you don't have.

You said yourself you didn't agree with auction. Was the agent THAT persuasive that she got you to sign up for something you didn't want?

Find out if you have any "out"... cooling off period perhaps?

Of course, if you DO want to pay all that then don't do anything, but for goodness sake, if you are having second thoughts, find out what you can do to get out of the expense you have signed up for.

 

[stevie_sloth]

I suppose so. The agent was persuasive. My partner is also unsure of what to do and worries about asking a too high price (she's worried any price remotely near what we need to move would be considered too high by potential buyers) so I think it was a relief NOT to have to put a price on it at all.