Hi there,
I've currently got a rental property (tenanted to a friend) which I am interested in selling.
Recently, an identical unit opposite sold for $630k.The current tenant has expressed some interest in buying my place.
Since he is a friend of mine, I would prefer to sell the property directly (without an agent) so that we each get a good deal.
Assuming my property is also worth $630k, what would the real estate agent fees be if I was to put it on the market?
I've never sold a property before, so not sure what sort of fees they charge. I heard it can be around 5%, which seems like a lot to me (for what they do).
i.e. what price should I offer to sell the unit to my friend for?Cheers,
H.You may have concerns about whether the costs for the agent are proportionate to the service, but just remember .. the agent only earns his commision (after retainer) when the property sells. So .. for your benefit .. the agent has every incentive to sell your property.
The agents incentives and costs dont have to be proportionate to the value you sell at. Most will ask for the advertising costs upfront, as they are not included as either part of the commission. Agents commissions can vary depending on how good and frequent business is. In outer suburbs where the transactions are frequent but of low value they can ask anything up to 3.3% (GST inc) + incentives .. in inner suburbs with higher priced properties they look towards trading at anything down to 1.1% or 1.2%. The agent wants to make about 10-20k (for the agency) minimum on the property else he is working for nothing. Agencies usually distribute on a rough 60/40 basis to the sales agent .. 60 to office .. and 40 to agent (split into a listing and a sale).
But really .. the agents fee is irrelevant to the equation here. If you are doing a transaction without the agent you just work out what an agent would cost you .. and deduct that from the sale price. Or just drop it by a little .. since you arent getting the headache anyway.
xdrew, i’ve yet to see a 1% comm on a sub-$2m sale but I stand to be corrected.
What city/town are you in, this will affect the agent commission.
You will need to have a contract of sale prepared.
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