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  • What do agents do for their money again?

    What do agents do for their money again?
    Since houses virtually sell themselves these days, and the internet connects buyers and sellers, what is it exactly the agents are charging tens of thousands of dollars for? Could their whole function be stripped down and performed by a simple government conveyer, with all the paperwork and checks included? I wonder..
    Be good for data collecting, would shave tens of thousands off the top of costs….in an ideal world.

  • #2
    Interesting thought. I too, thought the same. A work colleague advertised his home, private sale, for a month. No takers. Went with an agent, sold in the first week. In the hand to him was more money than what they were asking for with the private sale.

    Now, show me an example of the opposite. A defined example. Hard to do? Of course it is because those who sell privately, well, they sell.

    OTOH. You could find someone who had the property advertised with an agent for 90 days and then went for a private sale. That would be the one to give as an example.
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    • #3
      Keys makes a good point; but to find a property not selling for 90 days in this Auckland market means something is different.

      Someone will know what this sold for.
      Certainly interesting to see the emergence of social media in private sales.

      House buyers flock to tweets
      Their property has seen two busy open homes and 3000 views on Trade Me, all without the help of a real estate agent.
      Annabel and Elton McAleer listed their three-bedroom duplex at 2/80A Captain Scott Rd in Glen Eden, Auckland last Wednesday night. Within 24 hours, 1700 people had viewed it online.
      www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10902734

      DUE TO AN ACCEPTATABLE PRE-AUCTION OFFER, THE AUCTION HAS NOW BROUGHT FORWARD TO WEDNESDAY 31 JULY AT 730PM (ON SITE).
      www.homesell.co.nz/ID/10661/

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      • #4
        All depends on the agent and the way it is marketed. They do have value but like everything in life not all are created equal. People can always choose to sell privately there's no obligation to use an agent.

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        • #5
          Originally posted by McDuck View Post
          What do agents do for their money again?
          Since houses virtually sell themselves these days, and the internet connects buyers and sellers, what is it exactly the agents are charging tens of thousands of dollars for? Could their whole function be stripped down and performed by a simple government conveyer, with all the paperwork and checks included? I wonder..
          Be good for data collecting, would shave tens of thousands off the top of costs….in an ideal world.
          You think a Government based organisation to help save time and costs ? might be a first

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          • #6
            Over the years, there have been a number of sales organizations set up that aimed to bypass traditional real estate agents.

            I can remember one in particular, organized by a group of Auckland lawyers.

            All were based on the preconception that real estate salespeople were ripping off the public, and that they could perform the same sales function for a lot less cost.

            All of these organizations rapidly failed. So it would seem that generally real estate agents do often perform a difficult and useful function in return for the rewards they get.

            (I have never worked in the real estate sales field, and have no connections with that industry).

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            • #7
              RE Agents who use all channels available would probably sell more properties. I am amazed at the lack of adoption of even basic email marketing by some RE Agents let alone social media.

              cheers,

              Donna
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              • #8
                Originally posted by flyernzl View Post
                Over the years, there have been a number of sales organizations set up that aimed to bypass traditional real estate agents.

                I can remember one in particular, organized by a group of Auckland lawyers.

                All were based on the preconception that real estate salespeople were ripping off the public, and that they could perform the same sales function for a lot less cost.

                All of these organizations rapidly failed. So it would seem that generally real estate agents do often perform a difficult and useful function in return for the rewards they get.

                (I have never worked in the real estate sales field, and have no connections with that industry).
                I remember the one organised by the lawyers, but they had the misfortune to launch in the middle of a housing recession and simply couldn't get the volume of work required. They were modelling themselves on the Scottish example where lawyer conveyancing centres handle nearly all the house sales for around 1.5%....it seems to work very well for the Scots. I was completely non-plussed why they launched when they did, thought it should have worked.

                Nowadays I think the opportunity has more or less passed...the place in the market will be taken by increasingly sophisticated software matching buyers to sellers. If it isn't further development of trademe then someone else will do it, as long as they have the resources to market it effectively. I think people will flock to it.

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                • #9
                  the biggest drawback with private sales is that buyers simply dont like dealing direct with the vendors. Despite everyone stating they dont trust real estate agents, in my experience buyers are far happier negotiating through an agent.

                  Banks will often not require a valuation when a property is purchased through an agent, which again adds to their worth.

                  I did have the discussion just last night around the commission rates however. Houses have risen steeply in recent years at around 10% PA. Why should an agent get a 10% pay rise year after year? It would only take one large agency to drop their commission rates and the others would follow. But hey why would they, when they can cream it!

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                  • #10
                    Originally posted by Keys View Post
                    Interesting thought. I too, thought the same. A work colleague advertised his home, private sale, for a month. No takers. Went with an agent, sold in the first week. In the hand to him was more money than what they were asking for with the private sale.

                    Now, show me an example of the opposite. A defined example. Hard to do? Of course it is because those who sell privately, well, they sell.

                    OTOH. You could find someone who had the property advertised with an agent for 90 days and then went for a private sale. That would be the one to give as an example.
                    My current property was advertised for 1 year with a few agents no takers, for sale almost a year privately and we brought it they got the same in the hand as they would have got with an agent at original listing price. I have no problems dealing with either seller or agent.

                    They did make a mistake in the TM listing and it never appeared on any of my searches untill I did a specific street search, not sure what the did wrong tho so pays to check your listing thoroughly. I also saw over on TM forums emails from trademe are not getting to vendors.

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                    • #11
                      McDuck, all I have to say to you is "Try it"

                      Yes houses in places like Auckland are pretty much selling themselves just now, but this is usually not the case.

                      You have to think about the downtimes too, when vendors still want moonbeams for their property but purchasers have all disappeared.

                      And as others have mentioned, there have been several attempts to start up competing businesses. And they all fail. There was one maybe 2-3 years ago that charged a flat fee of around $8,995. They were going great guns for a while but fell over due to insufficient cash coming in the door.

                      So McDuck, give it a go, see how you fare.
                      Squadly dinky do!

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                      • #12
                        Originally posted by Keys View Post
                        Interesting thought. I too, thought the same. A work colleague advertised his home, private sale, for a month. No takers. Went with an agent, sold in the first week. In the hand to him was more money than what they were asking for with the private sale.

                        Now, show me an example of the opposite. A defined example. Hard to do? Of course it is because those who sell privately, well, they sell.

                        OTOH. You could find someone who had the property advertised with an agent for 90 days and then went for a private sale. That would be the one to give as an example.
                        I have two examples from my own personal experience.
                        Recently viewed a large house with a “private sale” sign on the front yard. Agreed to pay the seller his asking price and shook hands on the deal. His smart alec son-in-law jumps in and says an estate agent should be called in to make sure the price was high enough. Agent turns up, says he can sell the house for more than I had offered. House did sell for more, but by the time that agent’s commission was subtracted, the seller ended up with less in his hand.
                        This happened on another recent occasion, when a friend of a relative was selling up. Sat down with the seller, shook hands on a price over a few drinks, local estate agent somehow found out through the wife and promised them a higher sale price. House did sell for more, but after the agent’s fees were taken out, the seller ended up with less.
                        In both cases, the function of the agent was to line their own pockets, and not get the best price for the seller. I’d call that a destructive function.

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                        • #13
                          A few years ago.

                          Through a friend I found out a well located property was probably about to be put on the market.
                          I rushed straight over.
                          Two days of negotiations later, face to face, we had a deal.

                          Vendor....happy
                          Purchaser ....happy.
                          Look on local agents faces when they found out.......priceless.

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                          • #14
                            but all deals are different

                            Originally posted by Gladdynook View Post
                            the biggest drawback with private sales is that buyers simply dont like dealing direct with the vendors. Despite everyone stating they dont trust real estate agents, in my experience buyers are far happier negotiating through an agent.

                            Banks will often not require a valuation when a property is purchased through an agent, which again adds to their worth.

                            I did have the discussion just last night around the commission rates however. Houses have risen steeply in recent years at around 10% PA. Why should an agent get a 10% pay rise year after year? It would only take one large agency to drop their commission rates and the others would follow. But hey why would they, when they can cream it!

                            Yes I agree there is a place so the vendor and purchaser do not have to talk directly but is it worth the amount charged. In some cases yes there is a long drawn out negotiation (but not always the case with auctions) but what percentage of sales are fairly straight forward. I do agree that agents do have to do, in some cases, a lot of hard work - some cases require skilled negotiation and agents should be fairly recompensed for skills and time, but I don't believe this is the case in every deal. But how the pricing could be staggered I have no idea. I have dealt in the past with both - the agents who I fully believe they deserved their commission and those who just got an easy sale. Even to the point the sale was made in-spite of how bad the agent was.

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                            • #15
                              There are far too many agents chasing too few houses. I can understand some of there role in the settlement process, but for auctioned property, they are just overpaid door openers.

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