Real Estate Commissions

[keleri]

Probably an old gripe but was thinking of the amount you now have to pay to sell a property. The normal commission is 4% + GST so a few years ago the average house of $230,000 would cost $10350 to sell. Now with the same house selling for $320,000 the cost is $14400. Figures are a guide only and the time frame you can move but you can see what I am getting at. This is why the lawyers started up the REAL network (Real estate and lawyers ) to cash in on commission based fees. How do you all feel about commissions as they are or should the selling cost be per house not per value.

[cube]

New 'commision free' establishments (Green Door comes to mind, but there are others) are set to up exploit this gap - they charge a fixed fee, agreed up front.

However, I think they charge the fee even if the house doesn't sell, unlike REA.

cube

[BusyLizzy]

I like the idea of a 'per house' price - and maybe with the concept of a 'menu' of market activities that you require.

Or what about an hourly rate for the time they actually spend on the marketing and sale campaign? I'm not sure how feasible that is though.... but why not?

[Scarface]

For 10k, they spend 30min to 45mins for two months comes to about more than a grand per hour or there abouts.

[Dean@Massiveaction]

Pay peanuts get ?????
A good agent is worth every cent. Find better deals then the fees don't matter :-)

[Stevegoodey]

I gotta agree with Dean on this one, besides who wants to be an agent.

I've always tried to live by the idea that I will not take on anything I can't do in great bulk, because the really nice money is in doing things in bulk.

Steve

[kristover]

What took me a while to realise is that success based commission fees also pay for all of the deals that aren't successful (which is something I'm sure most people don't want to pay for!)

I think when its time for me to sell my own property, I will try myself first, and only go to a agency if they can secure offers that are higher than what I can get by the amount of their commission. It would take a lot to convince me to pay an agent on an arbitrary sliding scale. They do no more work for selling a $200k property than a $300k property yet rake in a much larger fee.

I wonder how long it will take for the NZ industry to follow the UK's lead who charge MUCH lower commissions on sales (i believe around 1%).