9 May 2012

Real estate agent commissions in Canberra?

9 May 2012 | Can

Hello fellow ACT rioters,

I plan to sell my property for the first time soon, so this query is for those property owners/landlords who recently sold their properties through a real estate agent.

What are the common commission and charges around at the moment?

Is it worth using a real estate agent or is it better to sell privately myself?

Should I pick an agent with big brand?

Any advices/suggestions is much appreciated! Thanks a lot in advance!

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zllauh4:48 pm 24 Jul 15

Hi Mate,

Would recommend that you give it a shot to sell by yourself only if you have a bit of spare time , it isnt rocket science and there are lot of govt website which has most of the paper work required.

Even the 2 % commission is quite a big amount and every penny saved is a penny earned.

My 2 cents.

Kurrajong10:05 am 24 Jan 13

The advent of Allhomes means that you can go with almost anyone you wish too – the secret is to pick a solid performer. I have always had good performance from older more experienced agents who have set up small boutique businesses. They are generally more driven to sell your home and the service is personalised. In my experience, I recommend you use an agent – you are dealing with people who are making big life decisions and emotions come to the fore easily. Paying 1.5% commission (no more) is a small price to pay for someone else to take the heat.

AinslieGarden5:25 pm 31 May 12

I am selling a property currently and spoke with three agents, all with generic big-name firms. I made it clear that I was talking with a few agents when meeting with each of them and was clear that I would take my time to decide who to go with in my own time. After speaking with each of them they, naturally, plied me with a barrage of phone calls, most of which I didn’t answer (re: “decide in my own time” – I hate feeling pushed into things). All of them kept lowering their commission in order to secure my business knowing that they were competing and I ended up settling with IMO the best of the bunch who, as a bonus, offered a rate of 1.7%. I am completely happy to pay this as he has worked very hard at negotiating up the price of the house with prospective buyers very successfully. He also knows the process well and has saved me SO very much time and effort understanding and carrying out what needs to be done.

My advice is to see at least three agents and maybe let them know you are shopping around. I absolutely recommend an agent over doing it yourself.

DanielK10:05 am 14 May 12

dtaya said :

By the way, the PRD agent introduced her husband (Financial broker) to us, it turned out to be very night mare as well.

The lesson number 2, never deal or do business with the husband and wife at the same time.

We had the same experience with this couple about 4 years ago. He was pushing us to leverage 95% of the value of our property portfolio to get into the “bull real estate market – you’ll never go wrong!” Six months later we had the GFC………. Thankfully we waited until then to buy.

Do your research on allhomes past sales data and check how many similar houses to yours are on the market and get an idea how long they have been there. Estimate a reasonable price for your property. Talk to a range of agents who know your area or have been recommended. Dont rely on word of mouth only, particularly from someone who doesn’t buy and sell fairly often. A seller’s assessment will depend much on the interpersonal relationship and the result. A good agent may be able to sell one house quickly, but not the one on the next street for many reasons – poor initial pricing, stubbornness of seller, poor layout of property etc.

For a first time seller, I would get 5-6 agents to come. You want to get information from them as well as a quotation. Ask about whether they work on properties themselves or with a cadet. If with a cadet ask how they divide up the work – you dont want a good agent to handball most of the work to a poorly paid cadet. And if you ask them about these matters they at least know that you require proper service from them.

That said, generally the established agents are fairly good and when they achieve a high price for a property it would be as much luck as anything else (eg two or more prospective buyers who just must have that house!)

Dont automatically go for a low quote.

Best of luck

dtaya8:51 am 14 May 12

By the way, the PRD agent introduced her husband (Financial broker) to us, it turned out to be very night mare as well.

The lesson number 2, never deal or do business with the husband and wife at the same time.

dtaya8:49 am 14 May 12

I have very bad experience with PRD, we were with them for 4 months, not even a single offer. They promised the world and good presentation then didn’t delivery at the end.

The contract is very tricky and fine details. At the end we went with the Luton with Humphrey Cornthwaite. He is fantastic, not bus*** and we felt very comfortable with him.

You can try to sell it yourself as well but I didn’t get any luck when I tried. Very tiring and stressfull.

We had our house in the market almost 10 months, waste 4 months with PRD. Bad things all the people who saw our house during the contract with PRD could not buy our house within 12 months after sacking them without paying commision to PRD.

Check the contract details very carefully. We got the experience once we paid the big lesson to PRD. It was the reason that we are more carefull and choose to go with Humphrey Cornthwaite – Luton. Talk to him what can he do.

Golden-Alpine7:26 pm 10 May 12

Can said :

Many thanks to all fellow rioters for the quick responses!

A colleague just told me this morning that Canreps is good for selling privately. I checked the web, it is more than three grands. I am tempted to pay a little bit extra and get the full agent service

I am going to check with those small agents suggested by v8banger.

Cheers!

Meet with those and meet with some others out of interest sake, just to see what you might get for another couple of grand.

Can10:49 am 10 May 12

Many thanks to all fellow rioters for the quick responses!

A colleague just told me this morning that Canreps is good for selling privately. I checked the web, it is more than three grands. I am tempted to pay a little bit extra and get the full agent service

I am going to check with those small agents suggested by v8banger.

Cheers!

trentanh8:04 pm 09 May 12

How about not selling?

ACT has the best rental return rates in the nation. Unless you absolutely have to you should avoid selling!

AG Canberra6:42 pm 09 May 12

Do a search of this site. I posted a decent summary of selling privately last year.

In short if you are a confident person and have a realistic view of what your house is worth, sell privately. If you have neither the time or confidence – get someone who does it every day to do it for you. If you do go down this path get recommendations from people you know. Word of mouth is much more reliable than a flash ad on TV.

v8banger5:52 pm 09 May 12

Hi Can,

Like almost anything, there are pros and cons, real estate game has no difference.

However, for an inexperienced owner, I would not recommend avoiding the real estate agent for sure.
Simple metaphor, you can choose to self-represent before court, but a sensible person would hire a solicitor/barrister. It doesn’t mean that you are not aware of the facts of the case (or what you actually did; drink driving, shop lifting, tax evasion…. Etc.. 🙂 It is a matter of the understanding of the profession and knowledge, the process and procedures, the tricks and traps around.

Same applies to real estate, it doesn’t mean that you don’t know your home/property well enough or the suburb you at. It is the knowledge within the industry. And that is also a risk management. To my understanding, all decent real estate agents would have proper licence, business registration and insurance. In the other words, I can see the safety net provided by the agent in case something went wrong during the transaction.

Don’t get me wrong, I totally agree with the above post that unreasonable commission and exaggerated fees are charged by some well known agencies (I call them oligopolies) in Canberra! To certain extents, you only pay handsomely for the brand names. Why the Audi A3 and A1 charges much more than VW Golf GTI and Polo? It is only the brand, the feeling of social prestige! Remember, VW is the big sister of Audi while all these cars are using the same platform and engines manufactured by VW! Funny thing is the Golf GTI and Polo were car of the year but not A3/A1! Unless your property is very unique and prestige, I argue there is no real benefit for paying extra for the brand.

Some may argue that good agent is always with big agency. Yes or no, I personally had despairing experience with one of the oligopolies just not long ago! I also had a very swift deal with a world-wide franchise in Canberra few years back. So, it maybe pure luck and I strongly recommend you to shop around and interview around.

Well, back to the point, percentage based commissions may cost you an arm (probably not and a leg yet); Zorro29 reckons 2.2-2.4% is the current norm from the oligopolies. Say, a $600k house, you may end up paying commission of just a tick less than $15k (plus promotion costs/ad package on top of it; here is the leg).

You might then lean to sell privately with your arm and leg intact. No, virtually it can’t be in real life! If you sell privately, Allhomes and Domain seems the only tools you need to have. But you know how much they charge private sellers? Allhomes just revised the private entries to around $1300 a couple of months ago. Domain’s Saturday ad cost is higher than an Airbus A380 can fly if you do not have a business account with them! You will also need to make some for-sale posters and open home signs etc. (You won’t find these things cheap in Canberra anyway!) Plus, you need to prepare yourself for negotiations with arrogant problematic buyers who propose unreasonable offers and settlement terms, losing precious weekends for open homes and aftermath…. Intact arms and legs, I don’t think so! (All in all, the middleman is used for these purposes and replace your arms and legs ;- )

As I mentioned in a previous post (http://the-riotact.com/private-real-estate-for-sale/71867), I personally don’t mind to pay agent fees if the price is reasonable and I don’t have to deal with the hassles! I currently found a few small Canberra agencies that advertise a much lower fees than the oligopolies, to name a few:

Golden Key Property Group http://www.gkpropertygroup.com.au $4,888
Ethics Real Estate http://www.ethicsrealestate.com.au $5,990
GoGecko http://www.gogecko.com.au $6,950

While I let me steam vented, you need to do your homework and weigh the value of using a real estate agent against the hassles you may face when selling privately :- ) Also, the oligopolies vs. small fish!

Final thoughts:
SHOP AROUND & RESEARCH is the only way!
I enjoy driving my new v8 muscle car rather than the hassles!

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