Posted on 06 JUL
Q: You probably won’t answer this. I think agent’s fees are exorbitant – how do you guys justify them? Nick H.
A: We love a challenge Nick and we absolutely understand how people feel when they see how much agents charge, especially when they think all we do is run a few open homes, set up an auction and pick up a big chunk of money.
This is far from the truth. Firstly, we (the agents) don’t get the entire fee: The agency takes a big piece of it. (The split between agency and agent varies and we’re not at liberty to say how much that is.)
What many people forget is that agents only get paid once they have sold a property for a price that the seller is happy with – no sale, no pay. And a good agent will more than pay for themselves – as we described in a recent article, sales through agents in the USA get an average of 20% more than a private seller. (The average commission in the US is 6% by the way). That 20% will more than pay for the agent’s commission.
Secondly, there is a lot of time and effort that goes into each successful sale, from the effort and expense of winning the listing (most sellers interview several agents, and only one gets the listing so there is the expense with no reward for the agents who miss
out). Self- promotion too is an expensive part of every agent’s outgoings – if potential sellers haven’t heard of you how will you ever get invited to sell their home?
Once we list a property there is plenty of work to be done. We have a 185-point checklist that we follow for every property we sell, so there’s way too much to cover here, but highlights include: writing advertising copy, arranging photography, collecting and reviewing all documentation (LIM, title, etc.) implementing a social media campaign, arranging/ running open homes Saturdays, Sundays and possibly Wednesdays, following up every single
inquiry from advertising and open homes, arranging access for building inspectors , valuers, etc., staying in contact with all buyers to ensure they come to the auction, arranging the auction, plus much more. And
of course if it doesn’t sell at auction then continuing the sales process (open homes etc.) until it is sold.
As we mentioned above, we can go through this process and if the property doesn’t sell we don’t get paid, so it is certainly in our best interest to get our seller a deal they are happy with and to help them move on.