Commission on property sales

[Springbok]

what % do estate agents charge on average in Australia? I'm going to put my house here in Joburg up for sale and will get a few quotes & negotiate, but some agents here still live in a dream world, wanting to charge 7.5%! I think 5% is more than enough.

Apparently agents in the UK get between 1.5% and 3% commission?

House prices grew a record 35% plus in 2003, effectively giving agents a 35% increase in commissions earned if everything else remained equal. At best, the agents' expenses went up 10%. And with internet marketing becoming a huge selling tool, the agents have seen a decline in advertising expenses therefore a much lower commission must be negotiated.

any thoughts from Australia as well as from those who recently sold their homes in S.A.?

[Mara]

We sold our home in Melbourne around four years ago and then we paid a commission of 2%.

[Noddy]

Hi Springbok

We sold 2 houses here in SA thru agents and YES! they charge way too much.

All our paper work is in and we are hoping to have our visas soon! soon! soon! so decided to sell our house. We had a couple of agents in and the commission they wanna charge is ridiculous to say the least, so we decided to try private property. Let me tell you - in my opinion - definitely the way to go. No commission and you still get extensive advertising just like sellers that go thru agents. Our house was sold in 4 days!

Something worth considering - after all - what have you got to lose???

Pam

[Springbok]

Thanks for that, Pam! I already got quotes from 3 agents: 7.5%, 6% and 5.5% willing to go down to 5% as a push. I will take 5% max. and if more than 1 agent is willing to take that, then I will ask each one to tell me why he/she should get the sole mandate and not the other agents. Quite like a job-interview!

But I'm also going to advertise on Private Property (PP) and will set this as a condition in the agent's "sole" mandate. Advertising at the same selling price of course. If the agent gets a buyer before I do through PP, then he/she will get the 5% comm. But if I get the buyer first through PP, then I will pay the agent only 2.5% comm. I first thought zero comm., but then again sometimes one shouldn't cut your nose to spite your face.

The agents will probably not like this idea, but whoever passes on the chance of earning about R55,000 comm. is a fool in my view. It's about time they start charging more realistic rates, like the 2% Mara said she paid in Melbourne. And in the U.K. it's 1% - 2%. The standard 7.5% benchmark in S.A. is outdated and the Institute of Estate Agents of South Africa (IEASA) actually got fined R500,000 by the Competition Commission in 2004. People need to negotiate more and not be scared by what the agents tell them. Recently, the unit trust industry slashed its fees as the growth in the stockmarket resulted in much bigger funds under management. Therefore it is my opinion that an increase in asset value should result in lower fees across all asset classes, including real estate.

Hi Springbok

We sold 2 houses here in SA thru agents and YES! they charge way too much.

All our paper work is in and we are hoping to have our visas soon! soon! soon! so decided to sell our house. We had a couple of agents in and the commission they wanna charge is ridiculous to say the least, so we decided to try private property. Let me tell you - in my opinion - definitely the way to go. No commission and you still get extensive advertising just like sellers that go thru agents. Our house was sold in 4 days!

Something worth considering - after all - what have you got to lose???

Pam