Agents fees vs selling a house privately

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16 years 1 week ago #174816 by Gracelands
I'll start by saying that I currently work for an Real Estate Agency [ducks]. Which has been a bit of an eye-opener, quite frankly.

As others have said, there are pros and cons. What I've learnt since working here is that there are estate agents, and then there are ESTATE AGENTS. The top ones are a breed apart, have the gift of the gab, work extremely hard, and sell 10 times the property that some others do. And you pay them exactly the same amount you would pay a no-hoper who has only sold 2 properties in the last year. (Assuing the no-hoper actually sells your property, and doesn't just waste your time for 3 months)

The right agent will know exactly what to advertise, when, where and how. They seem to know how to take the right photos and come up with the right wording. They also already have a lot of contacts etc of people wanting to buy houses (Particularly property investors)

One other thing, I would be wary of the whole Auction thing. They seem very keen to talk you into having an auction, and as far as I can tell, its mainly so they can get a higher percentage of the total commission from their agency. Sometimes an auction is the right idea, but I would say only for an unusual, unique or 'special' house. Just my opinion.

I think it comes down to skills and abilities (and time available). As you both have some flexibility with your work, the time needed might work OK for you, so you need to ask yourselves if you think you have the right 'skills.' Being able to talk people into stuff, etc.

Good luck whatever you decide.

"Just living is not enough. One must have sunshine, freedom and a little flower."
Hans Christian Anderson

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16 years 1 week ago #174861 by reggit
Thanks Gracelands - we do know an exceptionally good agent whom we'd use if we did decide to go that way, so at least we'd be assured he'd do a good job :D .

Take a break...while I take care of your home, your block, your pets, your stock! [;)] PM me...

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16 years 1 week ago #174893 by George
We sold our house in town privately using TradeMe last March and were very happy with the process. If you do decide to do it privately like others say make sure you have a good idea of price.

We got most viewings from people who had just seen the open home sign outside. However, we had deliberately chosen open home times that matched the ones of the local houses for sale with real estate agents to maximise this.

We set ourselves a time limit and if we hadn't had success in that time we were going to use an agent. We were moving out of the house at that time anyway so we wouldn't have been around to show people the house so an agent would have worked better for us.

The whole process was smooth. The hardest part was not believing the hype that the estate agents who came to open home gave us. We had one agent come and tell us that he could definitely get us more money and that he had 3 times as many people come to the open home around the corner as came to see our house and we should call him when (not if!) it didn't sell for us privately.

My recommendation is that if you have the time and are willing to give it a go it is worth trying privately in the first instance.

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16 years 1 week ago #174912 by Broomrider
Tigger, I sold our house through an agent, he had sold the house to us some years before, so he gave me a discount on the fee's. Just to give you an idea, the house sold for $570,000 and I paid $22,000 commission[:(!] that was the reduced rate[:0] and the agent made that in 3 months:cool:. I will never ever sell a house again through an agent. If you can do it, go for it... :)

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16 years 1 week ago #174918 by reggit
Gracelands/flying feathers, what percentage of the commission do the agents themselves get? :rolleyes:

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16 years 1 week ago #174956 by ravenseyes
I would be recommending using Homesell. When we sold the town house to buy the block we used them. The homesell rep came around, gave lots of advise, looked through the house offered to take pictures to use in the ads as well as using some of ours.

It linked to trademe so got lots of enquires through there as well as the paper. We prepared a leaflet to hand out with a copy of the LIM, reg valuation and latest rates bill so folks could see straight up. When you use an agent you still have to keep the house clean and tidy so the only difference I found was that for the open homes we were there instead of disappearing.

THe most annoying thing I found with agents especially with the blocks was the lack of basic research. Like which fences were the boundary ? Does it have a bore ? I went to look at one block I knew from a previous owner and I knew the troughs were supplied from the bore of the owner on the next block. He had the bore, this block had the stock yards, but I asked the agent and he swore the bore and pump was on this block. He pointed to the pump shed out in the neighbors paddock.:confused: Yet this block was going to be sold up in the $700K range so I imagine there would be a good commission on that yet this idiot couldn't tell a basic thing like that.

Gullies were also another bugbear - did the property go down the gully say to the stream in the bottom or was the boundary at the top or somewhere in the middle. Again, not a clue. These were well known rural/lifestyle agents around Hamilton who earn huge commissions selling the wonderful Tamahere mansions etc so I would have thought having basic knowledge of the property you were selling would have been mandatory.



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16 years 1 week ago #175007 by Gracelands

tigger;146092 wrote: Gracelands/flying feathers, what percentage of the commission do the agents themselves get? :rolleyes:


In my company it varies depending on the agent, how much business they bring in, and what type of listing it was. Usually 50 -60% for an exclusive listing, more for an auction, less for a general. Top earners also get bonuses on top of that, to a maximum of around 70%

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16 years 1 week ago #175010 by GrantK

Gracelands;146185 wrote: ...50 -60% for an exclusive listing, more for an auction, less for a general.

Thanks for your frank answer Gracelands :)

That explains why most agents push for an auction, I always wondered why they did that. It makes sense that they get more for an exclusive listing, as it guarantees that no other real-estate firm can get in on the action for the stated period.

Most agents will give you glowing promises of how much harder they will work if you give them an exclusive listing, but in my experience it is mainly a benefit to the agent, not so much to the property owner.

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16 years 1 week ago #175017 by Gracelands
I should add as a caveat to that however, that when the agents sell their own houses, they tend to go for an auction, which makes me think that they believe that is the best way to sell their property.

"Just living is not enough. One must have sunshine, freedom and a little flower."
Hans Christian Anderson

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16 years 1 week ago #175023 by GrantK

Gracelands wrote: ...when the agents sell their own houses, they tend to go for an auction, which makes me think that they believe that is the best way to sell their property.

We had a great result from an auction back in 2002 when the market was really fizzing.

But an auction I went to recently just up the road was much more subdued and the property was passed in. It's hard to generalise, but my opinion is that you need the right market conditions for it to really work, and I don't think the conditions will be right for quite some time yet.

To my surprise, the Bayleys agent also agreed that auctions aren't really a great idea at the moment. She cited a recent example where only one bidder turned up.

I guess in some cases it can still work, maybe at a mortgagee sale where the reserve is set low, and the bank is keen for a quick sale. But for you and me, who want to maximise the sale price, it may be better to take a more drawn out approach and test the market at various prices before deciding at what point to finally sell.

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16 years 1 week ago #175050 by sod
We are selling ours through an agent Harcourts in 1st few days he had people here before in was in papers etc.Plus he has been talking to all the people he thinks maybe interested, advised tender not an auction. They get 3% We will see how it goes :D :D

Having time is a measure of enthusiasm:rolleyes:

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16 years 1 week ago #175062 by ame

GrantK;146188 wrote: Thanks for your frank answer Gracelands :)

That explains why most agents push for an auction, I always wondered why they did that. It makes sense that they get more for an exclusive listing, as it guarantees that no other real-estate firm can get in on the action for the stated period.

Most agents will give you glowing promises of how much harder they will work if you give them an exclusive listing, but in my experience it is mainly a benefit to the agent, not so much to the property owner.


Actually, the reason agents will push for an auction is because the vendor has to pay for the auction process. i.e. the agent will be paid for going through the motions of having an auction regardless of whether the property sells or not. Time and again we noticed properties coming on the market with an auction date listed. A couple of weeks later, a 'standard' listing because it didn't sell. So, the agent pockets the fee for the auction, then the fee for the normal sale.

Don't forget, the agent is working for... the agent!! Not only that, but there is little incentive for them to get a really high price (read "Freakonomics" by Steven Levitt and Stephen Dubner for a good explanation of why) because of the fact that they only get a percentage of the selling fee. For example, let's say a house sells for $300k with a 4% fee. That's $12k to the agency. The agent gets, say, 50%, so that's $6000. Now, let's assume the vendor pushed the agent to set the price at $320k. Well, $20k is a big deal to the vendor, but the agent only gets 50% of 4% of $20k, which is $400 more. From the agent's point of view, why should they take the risk that the higher asking price will put off some buyers, or that the house would take longer to sell, for only $400?

A

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16 years 1 week ago #175111 by betenoir
I would never sell another place through an agent and in future I will be very reluctant to buy through one. I am also going to be very careful about chosing a lawyer in future. The only reason I am not sitting in an unsaleable dead duck is my own gut feeling and invaluable input from my mortgage company (kiwibank) and insurance company (FMG) both of whom gave their advice for free (alright they get my much deserved custom :) ) but picked up on the dodgy covenants that my lawyer and the agent assured me were 'standard'.

[SIGPIC][/SIGPIC] BAAAAAAAAA

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