Just wondering how you guys all go about negotiating real estate fees. What do you say to the REA to get the fees down? What is the most amount you’ve been able to reduce the fees by? It breaks my heart paying so much to the REA – especially when sometimes a property may only be on the market for a week or so.
Hi Bonnie
Absolutely!! They are negotiable like everything else in this world. Usually the REA has advised you the selling price and usually the best offer you get is less. I have negotiated the commission down on the basis that the REA had told me the property should fetch $xx and I am being offered $yy. To agree to the contract price I have negotiated a lower commission.
You may be told that “we can’t do that”. Untrue. The recommended commission rates are just that-recommended.
Conversley (and before I rise the ire of any REAs here) if you get an offer for around the price you realistically exepect, pay them their fee.The ones that do the job are worth the money.
I agree, commission rates are over the top and with a bouyant market, some of them have really done well.
markk
Happy Hunting
http://www.kentscollections.comI agree, commission rates are over the top and with a bouyant market, some of them have really done well.
Thats an understatement, what business do you know of that can double their income in a short time by pretty much not doing anything extra like advertizing or extra work. Like REA have in the last 2 years. AS far as reducing their commission, wouldn’t they put your home on the bottom of their list and sell the one with full commision?
RoboAS far as reducing their commission, wouldn’t they put your home on the bottom of their list and sell the one with full commision?You bet they will! That’s why you don’t make it an issue until you get to the negotiating table after any offers. Up to that point you would probably have signed an agreement accepting the rate anyway- but don’t let that stop you when it comes to the crunch!
markk
Happy Hunting
http://www.kentscollections.comI totally agree with the last comment made.
I have done this before and it rolls of the tongue (and for the squirmish who hate negotiation process)
They say to me” Would you consider this offer of $218K (if I wanted $220K) I say, YES I will, but I really need you to know how much I have invested in this property and need to ask YOU, that if. We take this offer now, will YOU reduce your commision by $2K. They still get $5K (still a rip off) but, in the end to be honest, as I have factored it into the price anyway, we can all be happy winners. They may not be excited to do too much work for you next time??!!
All the same, I am not a fan of RE agents at but I apprciate the exceptionals (like McGraths) – as if they were all like that, they would desreve their commision (amd sometimes more)
Cheers
Gavin
Oasis Property Developments P/L
Oasis Property Buyers
[email protected]
0414 576 314Totally agree with debtdogg – don’t play your hand too early!
I had recent experience where I negotiated the REA’s commission down by 20% – I was in an unusual situation where the buyers had their own agent and therefore everything was going through 4 sets of mouths and the negotiation become unworkable. The buyers pulled out of the first contract (conditional upon Buyer’s Inspections) but then came to us direct to negotiate a second contract. Once we were ready to go to paper, I rang the agent and asked them straight out to reduce their commission.
This is obviously a different scenerio than a normal sale but I would suggest that you work out a valid argument (ie length of time on market etc) and put it straight to them.
You will never know unless you ask!
Good luck
Becksoma
“It’s about the Journey not the Destinationâ€
Bonnie,
There is an underlying assumption in your question that REA’s are essential.
My experience is that they are not, and a sign out the front of your property is a powerful marketing tool.
A couple of things stand out for me;
1. You know your property far better than anyone else.
2. You can concentrate on, and give your full attention to, only the one property.
3. The agent has no authority on the contract of sale…they simply bounce backwards and forwards between the parties actually authorised to sign the contract.
4. If it’s your PPOR, what a fantastic way to give yourself a tax free pay rise.
5. Discount this old line “An agent will save you money – not cost you”. Alot of the time it’ll be your neighbour or a local investor who is the eventual successful buyer – have a chat and use the sign – at the end of the day, as the seller you can always so no to every offer if it is not to your liking.Make it your business to know the market if you are selling – don’t hand it over to the ‘experts’, you are the expert of your specific patch of dirt.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hello Everyone
After reading thru all your comments complaining how much there fee’s are and you wait till they have something to offer you before you start wanting to take money away from them for what they have achieved for you, I thought I just have to say something.
Yes there are some agents that should be shot but the ones that are part of my team in New Zealand deserve every cent that I pay them. Surely you would have interviewed your agents prior to signing a contract with them and know what you will be charged in the first place, and you would already have an idea of what your property is worth in the first place if you have watching the market in your location prior to selling.
I buy and sell a lot of property in New Zealand and need my real estate agents to be part of my team working hand in hand with my property manager. I bet you all don’t complain when they ring you about a hot new listing that is positive cash flow and under market value. It works both ways as that agent will remember you shot them down on fees do you think you will still be on there A list to ring when a new hot listing comes available, I don’t think so.
In conclusion a great real estate agent is worth looking after, I agree there are not that many out there but when you find them look after them and make sure they are part of your team and take them out to lunch instead of screwing them down on there fee.
Regards
Trish Clark
As a REA, I work hard for my money.Sure some deals are easy but we have a lot of difficult ones as well. If your agent can’t negotiate his/her fee and is willing to discount their fees in a hurry, what makes you think he/she is going to be able to negotiate with a purchaser in your best interest.
As far as selling privately, sure some do it well, but I have seen many people lose the sale because the contract isn’t written to be able to legally hold the purchaser to it. Some purchasers won’t noegotiate on a property with the owner as they don’t like offending the owner by offering them a lower figure than asked, they don’t want to personally have to face the owner.Purchasers also like to offer a dicounted price as they think that the owner doesn’t have to pay a fee.I have seen many properties sit on the market privately and finally an agent is given the listing and it is sold in no time.
You have to remember that when we make a quick sale it is probably from a purchaser that we have been working with for a long time. In this case it is not easy money as time and investment has been spent on these purchasers.Originally posted by robo:I agree, commission rates are over the top and with a bouyant market, some of them have really done well.
Thats an understatement, what business do you know of that can double their income in a short time by pretty much not doing anything extra like advertizing or extra work. Like REA have in the last 2 years. AS far as reducing their commission, wouldn’t they put your home on the bottom of their list and sell the one with full commision?
Robomortgage brokers. builders. governement/council tax collectors. settlement agents.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
Hi All,
Along with being a property investor, I also work for a REA, it helps with my investing to know what I am looking for and also what I am looking at.
To give you an example that you don’t have to pay agents big fees to get service, this is how our commission is setup.
House valued between 0-250k = $3,300 commission
House valued between 251-500k = $5,500 commission
House valued between 501-1Mil = $7,500 commission
House valued Over 1Mil= $12,500 commissionIf you have a 400K home and pay 3% +GST, you are up for $13,200 compared to our $5,500
An 800K home @ 3% +GST means you pay $26,400 compared to our $7,500 which add up to some good savings, which you can use for your next property or maybe a holiday!! Our service is different aswell, as you only have 1 person selling your house from start to finishSend me a PM if you would like to know more. I don’t normally push my REA on this forum, but this seemed a relevant topic.
When i had to sell my father’s property when he died i found an agent who was prepared to take the cost of advertising out of the settlement money rather than the other 6 agents wanted it up front.
another time when an agent had quoted a very high selling price and the best offer in was way below what he said i negotiated with him to drop his commission by a few thousand
Liz
I still maintain that if the cost of your agent is the only concern then go with the cheapest one of all – yourself. You would probably do better than a bad agent and you will save money.
http://www.megainvestments.com.auExtensive list of ‘Off The Plan’ property available for sale in Perth.
John – 0419 198 856
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