Estate Agents and Commission Rates

One of the important issues to consider when selecting an Estate Agent to sell your home is what commission rate they charge.

As a general rule, estate agents charge between 5% and 7 ½ % plus VAT. Sellers may be tempted to list with the agency that charges the least, but consider these other important issues before deciding.

As a property owner, when you sell you want to achieve the highest price the market will pay. This is only possible when your agent creates buyer competition through aggressive marketing, and the property has been correctly priced.

By way of an example, Harcourts Platinum has been offering aggressive marketing options to their sellers at fair commission rates for over 6 years. The average drop in price from list to selling price is 3.7% for Harcourts, compared to a local market average of approximately 7.4%. And over 25% of Harcourts mandates sell at the full asking price.

It’s simply impossible for an agent to offer a seller an aggressive and comprehensive marketing plan that’s committed to writing, if you select the agent who charges very little.

The fact is that marketing costs money. And an agent will generally spend as little as possible on marketing in order to achieve a sale. This is especially true when they have listed your property at a very low commission rate.

What really counts for you as a seller is how much you will receive after deducting the agents’ fees. So when interviewing estate agents ask them to commit in writing to what you will receive for the commission rate they charge.

What marketing is included? Where and when will it appear? What is the size and frequency of the marketing? And is the marketing plan in writing as, if it’s not, you won’t be able to hold the agent to it.

In this tough property market it’s really unlikely that cheapest is best. As in everything in life, you get what you pay for. That’s why most people haven’t purchased the cheapest car. They’ve bought the best they can afford in their price range and have made the decision based on the value they have been offered.

It’s the same in real estate. Select the agent you wish to list with based on the value they offer you. Why pay for something you won’t get? And don’t expect something that you’re not paying for. It’s just not going to happen.

Agree on a commission rate that is fair and will include a comprehensive written marketing plan that will create buyer competition and result in good offers at market value. Don’t be fooled into selecting the cheapest option that offers you no real value, no guaranteed marketing, and will almost certainly result in offers below market value.

For an example of a comprehensive marketing plan specifically created for your property and your needs feel free to contact a professional real estate company.

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