Hello all,
I was just wonder what peoples thoughts were on agents that are payed a commission rather than a percentage of the sale?
We currently have a offer on a house where the agent gets a flat rate of $6k. Unlike other agent I have dealt with, he seems to be more concerned with making the sale then getting a good price.
On day one he even told us what the owners were prepared to accept.
Admittedly he may of been playing "the game" but we think the price was pretty reasonable anyway.What are your thoughts?
If I was looking for another house I would be tempted to look for his agency more so (not exclusively) than others.
Cheers,
AlWhat is the incentive for an agent to achieve $20k above asking if they are not getting a % reflective of the additional work required achieve that higher price? Basically, all a fixed-fee agent will do is achieve the minimum price set by the owner, nothing more.
As with all things, applying a broad brush to a topic isn't always accurate.
I operate a flat fee agency ($5,950), and as it's my own business, I certainly aim for the highest possible price, as this is what builds a reputation, which in turns generates additional business.
I currently hold the all time, record sales prices in 4 suburbs in Canberra – which is more than most other agent's can attest to.
Obviously there are agents who work on volume, and don't care about the extra few thousand dollars – but I would argue that these agents are fly by nighters, and only survive until their reputation catches up with them.
Furthermore, it's exceptionally rare to achieve $20,000 over the asking price, or higher than an advertised price. Even if this exceptionally over the range price was achieved, it would only gross the agent an extra $600.
An agent charging 3% commission, would only receive $150 gross for negotiating an extra $5,000 – so the financial incentive for a full fee agent is exceptionally minimal when negotiating the final price.
Regards,
Erik Tyler – Managing Director, LIVEin Real Estate
http://www.livein.net.auThanks Erik,
I hope I didn't offend you or anyone else in the business.
I guess like you said, you cant group everyone together.
All the best,
Al
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