I’m keen to hear of any experiences listing an IP for sale with a RE agent recently – especially negotiating the sales commission.
I’m not talking about reducing it to a ridiculously low figure, most agents work hard for their commission. But in light of the fact that there is more demand than supply at the moment, and properties seem to be selling over the phone… are agents still really earning the standard RE schedule fee?
Today I put an IP up for sale (my first ever sale) and I must admit I didnt have much success negotiating! The agent simply would not negotiate although I presented a logical basis as to why I thought the commission might be reduced (sellers market, agents scratching for listings, no need for a quick sale, property is managed by the same office, making it easy to arrange access etc etc). I was confident I could negotiate a better deal when I went in there…
At the end of the day, I accepted the full commission rate – the agent convinced me that the benefit of using an agent (and paying for it) is their experience and negotiation skills ensure the best possible price from the sale – and as I have no time restrictions, I can wait for the best offer. If there is no sale, there is no commission for the agent (I pay only advertising which will be minimal).
As I re-read this, I feel I may have been suckered, but I’m keen to learn from my mistakes – your opinions and experiences please! Maybe I should have posted this question yesterday!
Tas [
]We have agreed on 2.5% commission for the sale of a block of land, usually 3%, on the understanding he will get other listings from us.
He tells me the market in the outer east is a little flat at the present.Hi Tas,
Bad luck, they try to make you feel inadequate, don’t they?? I thought that commissions were all to be “negotiated” these days, or is that in a perfect world?
Better luck next time…[
]Del & Will
Tas
i had one agent in Morwell quote 1000 less on a property than the other agent, but he said i had to pay 400 advertising up front. i was able to get him to add the $400 advertising to his commission and payable only if the property sold, (still $600 cheaper than Stockdale and Leggo). I hate the idea that i am paying for the advertising. it’s their business that is being promoted, so why should i pay?
Regards westan
Tas Investor
Where is your property, Tasmania by any chance?
If it was in Sydney (ie expensive) you could probably get it down to under 2%, but if in a cheaper country type area, the agents are not making much.
Imagine if you were selling $35,000 properties in broken hill or $500,000 properties in Sydney. Imagine the diff in commissions. And it is probably easier to sell in Sydney.
Terryw
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Tas, you have solved your own problem, demand is outweighing supply. Why would you not consider selling the property yourself? If you don’t live near the property, perhaps your property manager could conduct a couple of inspections for you (a carton perhaps?) In USA @ Britain figures suggest that up to one third of properties are sold by the owner. Can’t imagine why. Think about it and good luck. Geoff.
Thanks everyone, yes the property is in Tas [
] and is on the market in the mid to high 100K range. It is tenanted by a good tenant at present, and I offered it to the tenant first, not interested. I then considered selling myself (I have a dig. camera, could email photos easily to anyone, arrange inspections as Geoff suggests, how hard could it be?)Actually though, that was the argument the agent used to convince me to go with them… i.e. if I listed and sold it for $X (on the basis that I am expecting to sell quickly and easily in the current market) but they are able to actively market it and negotiate the best offer possible I may get $X + $15K, so after their commission I am in front. Yes that made sense, as I control the sale then I keep the agent working until they get that higher price for me, and in that sense they earn their commission. Fair enough, on the basis that you have to spend money to make money… i suppose.
I think the mistake i made was going straight to the agent I have some rapport with, and who I preferred to list the property – rather than doing some pre-negotiating with other agents first. I just assumed that I could negotiate a good deal on the spot.
Next time I will shop around first.
Tas [
]Hi Tas INvestor, good luck with the property. I don’t know the ‘custom’ in Tas, but in north side brisbane, it’s quite ‘normal’ NOT to have to pay for ANY advertising up front. The agent takes it out of their standard REIQ commission. (I personally have never ‘negotiated’ less commission than this but I definitely would refuse to pay any advertising – I am promoting their agency as well as my house, not this little black duck!)
I would also ‘have a go’ myself next time I want to sell.
Don’t ‘trust’ your agent too much. Stick to your price – you know, the ‘higher’ one he/she said he/she could ‘negotiate’ for you – make the agent get you that price, ie cover their commission.
They all say they can’t but we have found, even when we really thought we had ‘pushed it’ tooooo far, the buyers suddenly ‘found’ the extra money we insisted on, even after the agent was really pressuring us that this was their absolute LAST offer etc etc, incredible, so I’m afraid I don’t think the agents I have seen in action are ‘good negotiators’ at all WITHOUT a lot of steely grit from the vendor they supposedly represent – at the end of the day, they are out for a quick sale, at a good price to you, but not necessarily the ‘best’ price, ie those last few thousand, I believe, are irrelevant to the selling agent, but ‘those last few thousand’ to YOU, the vendor, is the money that covers that agent’s commission, so TOUGH IT OUT a little, you might lose one sale, but depending on how desperately you need the money, there will be another buyer…
and DON’T confide in ‘your’ agent, don’t say you are desperate, if you have already done this, get a steel rod in your back NOW and say you have been thinking about it, and you will NOT let the property go for less than..xyz…this is only my idea, good luck with whatever you decide to do, Kooringal.
ps the agent, I believe, if he/she IS good, will get you those extra thousands – if he/she does, he/she will get paid, if not, keep your cool, a buyer will show up, try the high price first and sit tight.
Tas [
][/quote]
I agree with the stick to your guns mentality. We sold a property in Brisbane back in April 2000 before the boom began. The property had been listed for three weeks and it did not look good. We knew the ppty was not overpriced. The agent told us we would not sell it as the market was dead and we were asking too much.
We told him it was either our price or we would take it off the market. Surprise surprise it sold in three days for the price we asked for. (very depressed we sold as the property would have been worth a fortune. ie one of those you learn from your mistakes situations)
Hope this helps
thanks for the last couple of tips – I will make sure when I get offers I really stick it out! I am not desparate to sell, and I really am selling to get the highest price possible in the current market. Hey if people are silly enough to buy over the phone – thats their problem. You’ve reassured me Kooringal [^]
Davo70 – hindsight is a VERY powerful thing. I hope that you were able to use the proceeds from the sale profitably somehow though?
Tas [
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