Do Estate Agents Charge Too Much?

That’s a sensitive topic.  I guess you could also ask if a heart surgeon charges too much.  I’m not suggesting the skills are comparable in any way.  But what I would suggest is that the answer to the question is comparable.

If the heart surgeon was the best in his field, had an excellent success rate and reputation, and gave you the very best chance of survival – then I doubt you’d argue over his fee.  You may feel it’s a lot of money – but you’d gladly pay it because the surgeon would be delivering value for his fee.

And it’s the same with estate agents.  Do they charge a lot of money?  Yes, they do.  Are they worth it?  That depends entirely on the agent, just as it would on the skill and experience of the surgeon.

If you listed your property with an agent that invested very little on marketing, relied on other agents to bring their buyers through instead of sourcing their own, and was hopeless at negotiating a buyer up to pay their maximum, then I would ask why you’re paying them at all?  What’s the point?  Stick a board up, place an advert online, and sell it yourself.

If you just want to sell your property, then by all means don’t pay an agent to do nothing.  That would be a waste of money.

However, if you want the very best result in the market, then I would argue you should be listing with the agents who are able to deliver you the best result.

Guess what?  The best agents are not the ones with the lowest fee.  Just as the best surgeon doesn’t have the lowest fee either.  So why would you select an agent based on who charges the least?

The best agents will invest a significant amount of money in executing a marketing strategy designed to attract the very best buyers to your property.  Their strategy is aimed at getting the buyers to contact them directly.  When they’re working directly with the buyer they will then use their expert skills and experience – honed over years – to get buyers to compete against each other, and to get you the very best offer.

Now that’s worth paying for, wouldn’t you agree?  That is what the best agents are trained to do.  At the end of the day, what really counts is what you get “in your pocket” when you sell, not how much the agent charges.

So, if you want the best result then use the best agent.  But be sure they have a marketing strategy to execute, and that’ they’ll invest in doing so.  And be sure they have great skills and experience.  I’m not sure an agent agreeing to slash their fee when you ask them to say much about their negotiating skills…

When you choose wisely you will be delighted with the result.  Cheap is not good.  And good is not cheap.

Steve Caradoc-Davies

Principal of Harcourts Platinum, and Director of Harcourts South Africa

Email your real estate question to steve.cd@harcourts.co.za.

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