As a seller, it’s only natural that you would want to save where you can on your selling costs. One of those significant costs is the estate agents commission. If two estate agencies were offering the exact same marketing, service, and results, and one was considerably cheaper than the other one, then it would make perfect sense to go with the cheaper option.
But that’s where the problem comes in. In most cases, you would find yourself comparing apples to oranges.
For example, there are “low-commission” estate agencies, who offer only some services like online marketing – but don’t do the buyer viewings or negotiation.
Then there are the “full-service” real estate agencies, but who offer what appears to be a much lower than normal commission rate. In all cases, it’s important to understand exactly what you are getting for your money. Don’t be fooled into thinking that all real estate agencies, services, and results are equal.
As with everything in life – you get what you pay for. So do your homework thoroughly. Here are some pointers on what to research and the questions you should be asking:
- What is the commission rate, and are there any fixed costs that you will incur even if there is no sale? In some cases, you may have to pay for marketing up front irrespective of whether or not the property sells. So what are the costs, and when do you have to pay them?
- What kind of marketing will you get? If you are offered only Internet or website marketing then be aware that you are not getting a full marketing plan. It’s true that many buyers shop online, but certainly not all of them. What of print marketing? Showhouses? Database marketing? And is the marketing going to make your property stand out in the crowd? A weak marketing plan means weak buyer enquiry and low offers.
- What service will you get? Who is going to do the buyer viewings? Who will qualify the buyer for finance? Who will do the negotiation? Negotiation is absolutely critical in getting the best price. An experienced agent knows how to create buyer competition – which is the only condition under which a buyer will pay their maximum. Without it, you will get low offers. Period.
- What is the agency track record? What is their market share? What is their “average days” on the market? What is their average drop between listing and selling price? Simply put, can they show you factual proof that they are able to get you the best result? Talk is cheap – ask for the facts.
A low commission rate does not guarantee you the highest net price. Usually, it gets you the opposite. Without powerful marketing and experienced selling skills and strategies you almost certainly won’t get the highest price the market will pay. Be sure to research thoroughly. Often what appears to be the cheapest is the most expensive.
Principal, Harcourts Platinum