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Michael F.
Michael F.
Parkdale, VIC
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What are your thoughts on the online real estate agents that offer flat rate fees instead of percentage of sale price. At first glance there appear to be massive savings, however what are the risks associated with these companies?

4 years ago
Comments

For example Typically, agents charge 2.2% of the sale value in commission.

On a $100,000 property, that’d amount to $2,200. On a $200,000 home, it would rise to $4,400. That doesn’t sound like much of a saving, but try finding a home in Australia selling for less than $200,000.

In Melbourne, where median house prices are valued at $725,000, an estate agent’s commission would fetch an eye watering $15,950 at 2.2%.

Compared to a flat fee of $4,500, that represents a saving of $11,450.

In Sydney, where median house prices are valued at $996,000, that figure rises to $21,912.

Responses

Hi Michael, any business has risks. It's down to what you want and if your engaging someone who can deliver. Regards Ariel

Hi Michael,
When I last sold a property I took some time prior to listing, to observe how each of the local agents performed. This was measured in a number of ways;
1. Who is achieving the best comparable prices in the area
2. Who is selling for less than what was originally quoted
3. How are the agents conducting themselves at open for inspections, and are they following up their leads - my wife and I were "mystery shoppers" at a number open for inspections
4. What's the average days on market for each agent.
I personally wouldn't place my property with someone based on price alone, you want someone with the appropriate expertise.
To make matters more interesting, we actually scaled up commissions if the agents hit certain targets. Coincidentally, the last two properties we sold achieved great results.
I have access to some great RP data reports that can help with some of the above mentioned metrics.
Feel free to give me a call on 1800 LOANCO if you'd like access to these reports
All the best,
Gerry Ardesi

Comments

Great feedback Gerry, research and communication is always the key.

Hi Michael,
The old adage, you get what you pay for applies here. Do you want to save $10,000 or do you want to achieve the best price available for your home? I don't believe you will do both.
Research 4 or 5 local agents through their online presence, their opens and Auctions and the prices advertised and actually achieved as well as how they follow up after an appointment or open.
Good luck Michael

Depends. I love them but I love all new disruption/competition. I also love how the top professionals add value beyond their fee/commission. I do caveat this that, all drivers are not equal - just like professionals

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