Will agents ever stop the crap?

Thanks TB, I'll keep that in mind. I, like everyone I'm guessing, have had some absolutely brilliant tradies and unfortunately some real nongs. Fingers crossed for the former.

Perhaps I was a little harsh but just reading what a great deal the investors over east get made my blood pressure rise slightly towards the danger zone, and like you say it seems they charge 3 times for the same service under a different euphemism. Talk about "The Hollow Men", WA agent's can spin faster than a Westinghouse twin tub.

Cheers,
Beef.


maybe you need to ask them what the management fee actually covers??

Maybe you could take back that part ie you could provide a bank account number for the tenant to deposit into :D
 
Unfortunately real estate agents charge a lot more in WA than they seem to in Qld. The norm is 8.5%, +GST, + 2 weeks letting fee (all payable by owner), plus insepctions, plus tribunl representation, plus tenancy end reports (wtf? how is this different from a regular inspection?), inventory reports (I have no idea what this even is...),

TB

Wow, that's a big difference compared to Brisbane. I'm obviously wrong. I've got a friend who was able to negotiate his management fees down to 5% plus GST with no other costs apart from 1 week's letting fee.

13-14% overall is puzzling. Maybe the competition in WA is not as fierce for rental properties as in Brisbane.
 
13-14% overall is puzzling. Maybe the competition in WA is not as fierce for rental properties as in Brisbane.

From my own experience and the results of obtaining figures from 4 different agents that all appear to be very similar, if not identical, I'd say there seems to be plenty of agents, just no competition.

Pure speculation of course, but other industries would probably be subjected to scrutinisation over apparent price fixing in a situation like this.

Cheers,
Beef
 
Beef Hooked,

You are wading through another one of the reasons why we decided to discontinue acquiring that form of asset from our portfolio.

Too much collusion (REI and their members are in the thick of it...no point complaining to them about their own members hey !!), and way too high fees.

Your total list is almost identical to what we were quoted for PM fees. Total PM take ranged from 18.5% up to 22.5%. Makes managing yourself a no-brainer, given the simplicity of the RTA.

To answer your question Goanna, the PM fee itself is just revenue straight off the top....any physical thing they actually do is charged separately. You get zippo for the actual PM fee.

Over here in the West, we are sometimes perplexed at the amount of people who are happy to just palm it all off to a PM. For 6.5% why not indeed. Crank that up to 22%, and you may change your tune.


I suggested to my wife, who is a qualified PM, perhaps start up an agency and charge a flat 10% fee. There seems to be something inherently fair about the flat 10% fee that as an Owner I am attracted to...rather than being slugged for 17 different charges, which bumps the recommended 8.5% up to well over 20%. Of course, the business model didn't work, due to anumber of significant reasons ;

1. We found out being a qualified PM doesn't allow you to charge PM fees. You need to have a tri-ennial certificate for that. That's held by the elderly fat cat at the back of the agency who does nothing except collect a big fat fee for everyone to work under his authority. Jumping through the REI hoops to get one of these wasn't worth it.
2. Massive overhead charges (due to paying the fat cat holding the TC).
3. Huge whinge factor from both Tenants and Owners.

We decided we wanted to move away from the whinging, not jump in the deep end and be constantly surrounded by it.

Anyway, good luck BH, I reckon you're on a flogging to nowhere.
 
Beef Hooked,

You are wading through another one of the reasons why we decided to discontinue acquiring that form of asset from our portfolio.

Too much collusion (REI and their members are in the thick of it...no point complaining to them about their own members hey !!), and way too high fees.

Your total list is almost identical to what we were quoted for PM fees. Total PM take ranged from 18.5% up to 22.5%. Makes managing yourself a no-brainer, given the simplicity of the RTA.

To answer your question Goanna, the PM fee itself is just revenue straight off the top....any physical thing they actually do is charged separately. You get zippo for the actual PM fee.

Over here in the West, we are sometimes perplexed at the amount of people who are happy to just palm it all off to a PM. For 6.5% why not indeed. Crank that up to 22%, and you may change your tune.


I suggested to my wife, who is a qualified PM, perhaps start up an agency and charge a flat 10% fee. There seems to be something inherently fair about the flat 10% fee that as an Owner I am attracted to...rather than being slugged for 17 different charges, which bumps the recommended 8.5% up to well over 20%. Of course, the business model didn't work, due to anumber of significant reasons ;

1. We found out being a qualified PM doesn't allow you to charge PM fees. You need to have a tri-ennial certificate for that. That's held by the elderly fat cat at the back of the agency who does nothing except collect a big fat fee for everyone to work under his authority. Jumping through the REI hoops to get one of these wasn't worth it.
2. Massive overhead charges (due to paying the fat cat holding the TC).
3. Huge whinge factor from both Tenants and Owners.

We decided we wanted to move away from the whinging, not jump in the deep end and be constantly surrounded by it.

Anyway, good luck BH, I reckon you're on a flogging to nowhere.

That was what I have found the real estate agents are protected species. All companies use the REIWA's form (fees and charges etc). They are doing nothing for the management fee while charging separately on everything they are supposed to do. Rental rolls to them are quite important to their surviving. For a rent, you take aways 14-17%, + mortage , it makes very hard to the investors.
 
i have certainly got to agree that the circumstances that you describe are far from satisfactory and also go a long way to answer why there is a particular venom in the comments about agents from you good folks who come from the west.

Further, i also got particularly sick of the PM's in Kalgoorlie i dealt with whilst we had property there - they only charged 9%, but when you added up the other charges and combine that with the distinct lack of service - it's why we sold up and shipped out of WA.
 
What next?? a processing fee, discharge fee.. they sure have imagination.

Well here's another example. As we've just sold our PPOR we need to find a rental. Just been to an open home and guess what..the REA charges an 'application fee' of $15....there's another rental property I wont be applying for. So any of you LL that are all for an application fee, just keep in mind how many potential tenants are walking away from the agency because of it.
And they also charge a one weeks reservation fee as a 'show of good faith' ...Yeah Right!

Cant believe this crap they go on with.

Agent is Harcouts at Baulkham Hills
 
..the REA charges an 'application fee' of $15....there's another rental property I wont be applying for. So any of you LL that are all for an application fee, just keep in mind how many potential tenants are walking away from the agency because of it.

Yeah I wasn't saying it was good business sense, I was just saying REAs should have the right to be able to charge it if they want to (even if it does drive people to their competition).
 
Well here's another example. As we've just sold our PPOR we need to find a rental. Just been to an open home and guess what..the REA charges an 'application fee' of $15....there's another rental property I wont be applying for. So any of you LL that are all for an application fee, just keep in mind how many potential tenants are walking away from the agency because of it.
And they also charge a one weeks reservation fee as a 'show of good faith' ...Yeah Right!

Cant believe this crap they go on with.

Agent is Harcouts at Baulkham Hills

Sorry IanInvestor, I have to disagree with you.

An application fee charged to the applicant will discourage them from applying.

This means less applicants for your property, so its costing you tenants and money.

Especially bad since you dont see the $15. The agent pockets it, and odds are that you probably dont even know that its going on.

Imagine 4 applications a week! They'd make MORE money rejecting applications than approving them!
 
Well here's another example. As we've just sold our PPOR we need to find a rental. Just been to an open home and guess what..the REA charges an 'application fee' of $15....there's another rental property I wont be applying for. So any of you LL that are all for an application fee, just keep in mind how many potential tenants are walking away from the agency because of it.
And they also charge a one weeks reservation fee as a 'show of good faith' ...Yeah Right!

Cant believe this crap they go on with.

Agent is Harcouts at Baulkham Hills

Hi Shady

I'm not familiar with application fees being charged for potential tenants, but I do know that here in NSW lease preparation fee costs are shared by the landlord and tenant, at a maximum cost of $15 to the tenant. Every tenant has to pay this as does every landlord. Perhaps this is what the PM was referring to?
See this DFT fact sheet for more information:
http://www.fairtrading.nsw.gov.au/A...nancy/ftr37movingininformationforrenters.html

Re: the one weeks rent as reservation fee. If your application is unsuccessful, it's fully refunded of course. If not, then it's included as the first week's rent. However, should you decide not to go ahead with the lease agreement, then some agencies may retain a portion of this as compensation for the landlord and PM having to locate someone else.
 
Sorry IanInvestor, I have to disagree with you.

An application fee charged to the applicant will discourage them from applying.

This means less applicants for your property, so its costing you tenants and money.

Especially bad since you dont see the $15. The agent pockets it, and odds are that you probably dont even know that its going on.

Imagine 4 applications a week! They'd make MORE money rejecting applications than approving them!

I'm not sure if you meant to address me or Shady, since you quoted shady but then addressed me, but I'll assume you meant to address me for the purpose of this reply...

So you disagree with me? That means you feel that agents shouldn't have the right to make bad business decisions.

I never said it wasn't good for your bottom line, my only argument is that they should be free to make whatever (sometimes dumb) business decisions they like and then experience the consequences.

Eg, it should be up to an agency to set fees (including application fees) and then watch their customers flee to their competition instead... it shouldn't be up to some law to prevent them from such stupidity.

-Ian
 
There is clearly a discrepancy in the level of fees and services provided by r/e agents between WA and the eastern states.

I can think of some reasons why there may have been a percentage difference in the past:
  • Low rental values in WA. Same work required, so same cost of doing business in total dollar terms. To recoup this agents needed to charge a larger percentage.
  • Smaller rent rolls in WA?
  • Rental agencies in eastern states only set up to keep contact with potential buyers and sellers of property – i.e. almost run at a loss, but used to make sure an agency has first bite at listings should an owner decide to sell.

That’s it – cant think of any more reasons for WA potentially having higher r/e costs for rentals than eastern states. Can anyone add to this potential list?

Note though I think the potential reasons don’t actually apply as:
  • WA rental values appear to be similar to those seen across the country
  • I have not seen it reported anywhere that rent rolls in WA are smaller so we should discount this theory
  • I can’t imagine that any self-respecting business man would set up something as painful as a rental agency simply to provide marketing opportunities.

We now have a situation in WA where the percentage charge is higher (or at best similar) to that charged in Vic, NSW, Qld – PLUS we get slugged for any actual work done (rent inspections, re-letting, tribunal, etc).

It would seem that real estate agent fees are some 10%+ greater in WA (overall, when adding in all charges) than elsewhere. Is there any way to get this huge difference investigated by a govt department? Who? Where? How?

TB
 
Is there any way to get this huge difference investigated by a govt department? Who? Where? How?

You forgot 'Why?'.

Am I the only one here who strives for a free country?

Please do me a favour next time you speak to a government department tell them *(#*($#*( from me.
 
OK then, so what is YOUR Real Estate association or whatever it's called going to do about it?

(sounds of silence and crickets chirping)

Prob nothing...

but just because i am in the industry doesn't mean i agree with everything they say and do either - I also am against a lot of the things people here are complaining about. If the silence is deafing it is probably because they are toothless tigers and can't regulate it any further...

i dunno - but i certainly am not going to defend them.
 
Am I the only one here who strives for a free country?

Hi ya,
I think you are saying that the market should sort this out, and we should involve government or regulatory bodies less in what we do. I tend to agree. However there seems to be an imbalance here in that agents seem to be colluding and price fixing.

The playing field is not level – I cant simply go next door to the better or cheaper r/e in this case as they offer the same excellent service.

I suppose, if it got unbearable, I could simply manage the properties myself, or if I thought the profit margins were exceedingly high, I could set up my own agency.

I don’t mean to whinge or sound like I am crying out for someone else to save me from my problems. I am simply perplexed as to why 15-20% of my rental income should be eaten up in this way when my counterparts in other parts of the country seem to pay less than 10% all up for the same servce.

Getting even further off topic, but this shows that the real estate market is NOT efficient in the way that the stock market is. Gross imbalances can occur, and these can provide large obstacles and opportunities for people investing in this asset class.

TB
 
Are you sure? Why are you asking for a letting fee of 2 weeks? Why are you charging the stamps and phone calls?
Are you sure? UC is from Queensland and the maximum letting fee allowed in Queensland is one week... You should get the get the facts right before making sweeping generalisations;)
 
TheAnalyst
Reading on, I see you have already been informed of the above information and I see your problem is with WA REAs. You should specify this in your posts, rather than making generic statements about all REAs...
 
Back
Top