Promises of low commissions, high property ‘valuations’ and guaranteed sales are just some of the tactics agents may use to lure home sellers to sign with them.
When listings are low, desperate and inexperienced agents will do anything to get your listing. Cutting commissions and overvaluing property are two common tactics agents use to entice home sellers. If a low commission and a high ‘valuation’ seem like a great deal, you should think again.
You can spend a fortune advertising an overpriced home on the front page of The Age and it still won’t sell. Why? Because it’s overpriced.
“All agents agree, the longer a house stays on the market, the harder it is to sell and when it does, it sells for less.”
On average agents charge between two to five per cent commission, with the inner suburbs generally being lower. When comparing commissions don’t forget to add the marketing costs which can be as much as one per cent of the property value and is payable regardless of the outcome.
Here is something you should seriously think about:
“If an agent’s only method of getting a listing is by drastically cutting their fee, how are they going to negotiate the best price for your home when they can’t negotiate themselves a decent fee?”
In contrast, agents selling a better paying client’s house will put in greater effort and be more motivated to sell.
If you pick an agent purely because they entice you with a low commission you will inevitably pay for your mistake with a low sales result or worse no result at all and be out of pocket thousands of dollars in marketing and advertising costs.
All agencies have a break-even point. An agent who discounts their fee will need to have a higher turnover of properties to make money and may try to get properties in and out like a sausage factory. You could be just another number on their conveyor belt.