Selling Real Estate - Tell Us Your Stories

• • 

    Penalty boxer on 13/05/2016 - 18:27

    Yeah very lose description here. I don't want to cross the line of advertising!

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  [Deactivated] on 13/05/2016 - 15:37

  +2

  I look at how much we paid agent, and it's crazy - they did so little work for how much they got. All agents in the area were quoting similar. I'm thinking now we should have haggled, but as a first time seller I didn't realise how little they did. They would still make heaps even if we paid half or quarter, and it wouldn't have affected the outcome at all because they did pretty much nothing.

  • 

    curryblender on 13/05/2016 - 21:28

    +2

    I would like to put in my 2 cents.
    I work as a real estate agent and it looks all gold from outside but the actual agents don't make much.

    If you are quoted say $10,000 to sell your property, the agents make around $4,000 out of it. There are a lot of agents who can sell 4-5 a month but not everyone.

    To make that $4,000 we have to create and maintain our database, which takes a long time. I personally did a lot of door knocking, getting as much detail as I could. Calls all day to potential customers. Negotiating with customers who have no idea what they want to buy. Staying in touch with the Vendors and their demands especially trying to sell a property with tenants is a pain in butt.

    Working from 8:30AM to sometimes 9PM negotiating sales and listing.

    There's a reason only 10% of the agents get past the first six months.

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  Mad Max on 13/05/2016 - 17:52

  -1

  "I look at how much we paid agent, and it's crazy - they did so little work for how much they got"
  So true.
  What I do not understand is why do so many people (99.9%?) use an agent?
  It does not seem too difficult. Why not try to sell your own house? You can advertise on newspapers and realestate.com.au exactly as they do.
  You can do open houses or private inspections exactly as they do.
  All you need is to buy a standard real estate institute contract.
  And should things go wrong you still need a lawyer because the agent would not do anything anyway.
  So why not?
  Save $13,400 on the sale of a $500k house. $25,900 on a $1m house.

  • 

    Penalty boxer on 13/05/2016 - 18:31

    Something like this: http://purplebricks.com/ ?

  • 

    Daabido on 13/05/2016 - 19:44

    I'm pretty sure private sellers can't sell on realestate.com.au.

    • 

      curryblender on 13/05/2016 - 21:30

      There are tens of online sites where you can pay $600 or something like that they advertise it for you.

      • 

        Daabido on 14/05/2016 - 07:12

        Yes, so not directly, but indirectly.

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  ms_caz on 13/05/2016 - 18:01

  +4

  Our agent worked his butt off in order to sell a very ordinary 3 bedroom 2 bathroom property in a fairly dodgy suburb for about $40000 above the estimated price indicated to us by other salespeople.

  We were in constant phone contact with him and even over the dead Christmas New Year period he was taking people through. It took three weeks from listing to sale.

  When we listed he suggested that he could get us what we thought was this ridiculous price. We laughed, but agreed to an additional marketing package, which he would pay for himself if we didn't sell at or above the agreed (ridiculous) price, and incentive commission which meant that we paid an extra 1.5 percent above the standard commission if he got our price (paid on the amount over or above the price he aimed for). In the end the commission we paid WAS more than we would have paid than if we had gone for one of the other agencies - but we did get an extra 10% on the sale price which more than made up for it.

  So - I'd be more than happy to use him again and to recommend people to use him as a sales agent. There's no way I'd BUY a home from him though!

  • 

    Penalty boxer on 13/05/2016 - 18:30

    +1

    What suburb did you sell in? Did you agent give you a list of comparable properties? What made you think the price was ridiculous?

    • 

      ms_caz on 14/05/2016 - 05:08

      +2

      I don't want to mention the suburb here but I can tell you a bit about its demographic. The suburb itself is in the Sth East suburbs of Melbourne, but there are very wide divides within that suburb. It has distinct geographical and economically diverse sub-suburbs. This property was one my husband had bought as an entry level home 10 years ago - at that time just a basic brick veneer on a basic block, but surrounded by home owners who "kept the place nice". As the suburb has grown there are many many more new housing developments, with lots of brand new properties available, meaning the older ones in our area are being sold off by the dozen and prices are comparatively low. We investigated the market very carefully regarding comparable prices within the sub-suburb. There were literally dozens for sale in the surrounding streets, and ours was priced well above, or at the same price but lacking similar features eg garage, remodelled kitchen, polished floorboards, established garden/pergola. We accessed comparative price data for an idea of sales achieved recently, and we did approach a couple of other agencies for their thoughts, sales plans etc. We took our time to make the decision to sell, and the agent we listed with chased us for the property. We thought his estimate, his timeframe and his package were all crazy, because if he didn't reach it, priced $40k above the comps, then he was getting nothing (and would have been out of pocket for the marketing).

      • 

        Penalty boxer on 16/05/2016 - 11:10

        Wow that sounds great - well done on the result!

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  kcyw on 13/05/2016 - 22:33

  I sold a property last year. In hindsight, I should have just gone with the cheapest agent since prices were high and interest from multiple buyers were expected. The agent I chose seemed knowledgeable but with competition from bidders, the selling price depended on bidders' interest only and not the agent's skill.

  1.76% was what I paid (for land only), plus advertising and miscellaneous fees. There were fees for administration which was just a con but I had no time or energy. And once we signed, they weren't willing to come to my home anymore to save me time (he made an excuse to make me go to his office).

  • 

    Penalty boxer on 16/05/2016 - 11:19

    1.76% sounds pretty reasonable depending on where you live (assuming you weren't gouged on marketing + misc. fees). It's a shame that once the dotted line is signed the level of service comes down.

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  GameChanger on 13/05/2016 - 23:08

  +1

  People still employ the service of an agent because they don't have the skills in (1) Negotiation and (2) emotionally attached.

  As to why they charge high fees, its because most agents don't receive a base salary. Furthermore any commission they make at least 50% will be taken away by the company. Add in the fact the real estate market is flooded with agents, you can see that some agents are barely surviving, whilst the top 10% of agents are absolutely killing it.

  If you want to talk about lazy occupation its car salesmen, that receive a base salary + they get customers come to them.

  • 

    [Deactivated] on 14/05/2016 - 09:26

    Have you ever worked as a car salesman?

    • 

      GameChanger on 14/05/2016 - 09:42

      No I haven't.

      Go walk into most dealerships and you see the lack of service like retail stores. And of course there is exceptions but most are not hungry for a sale.

      The worst offenders is the luxury market where they judge you by the clothes you wear.

      • 

        robertbruce on 14/05/2016 - 09:51

        They are not judging you, they are judging themselves. There 'aint nothing worse than having to work with the public!

      • 

        [Deactivated] on 14/05/2016 - 09:55

        -2

        (…) they judge you by the clothes you wear.

        That statement says more about you than them. "No one can make you feel inferior without your consent." - Eleanor Roosevelt.

      • 

        GameChanger on 14/05/2016 - 10:15

        @Jar Jar Binks: nope.

        Walk into one of the luxury dealer with casual clothes no service at all. A week later same day, business attire and bang the level of respect I received was astounding.

        You're living in a different world if you think service level isn't dependent on how you look etc..

        Sales people are vicious by nature and they weed out waste of timers by many different measures.

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  Euphemistic on 14/05/2016 - 08:00

  +1

  We sold or house about 12 months ago.

  We had contact with an agent (A) from a sale a few years ago (whose agency we also bought our new hose from), and an agent (B) that had helped us in looking for a new place. We sold our home with agent B that had been in contact with us many times during the looking phase (about 9 months). He was the agent that rang us as soon as our new house came on the market becuase he knew it fit our criteria, despite it being listed with the agent A's business. At the end of the day despite letting agent A know what we were looking for we hadn't heard from him at all during the search phase so agent B got our business because we knew he was actively looking for sellers and buyers.

  In the end we sold our house in a great market within a week of listing and probably could have saved some commission if we had really tried, but it was worth it for a quick sale. We bought first then sold so extra mortgage payments for two properties was going to chew up the difference for a slow but higher price sale quickly.

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  rm8 on 14/05/2016 - 09:47

  +1

  Sold two investment properties in Melbourne when I was living in Sydney a few years ago - apartment in the cbd and a house in the western suburbs. Both were sold by the agents that managed the rentals.

  Apartment agent was a small boutique firm, fancy office, designer furniture, marketing logos, sale packs, all that jazz. House agent was a well known agent with plenty of offices around Australia.

  I negotiated a structured commission based on what I wanted and what would be a stretch. The difference between the two agents was astounding.

  The smaller agent gave me a full breakdown of all expenses for advertising, weekly marketing plan and daily updates by phone and email after inspections. We got 4 offers in the end and played around with offer vs settlement and got what I wanted. They arranged an interim 10 week rental and worked with my family to make sure the place was empty for settlement as it was fully furnished.

  The house agent experience wasn't disappointing but it just didn't seemed like it had the same "effort". Price is X, marketing is X, inspections are X, here are your offers. I floated the idea again of offer v settlement and the response was blunt, no these are the offers. Got what I wanted in the end though so I guess it all worked out.

  Agents do serve a purpose, but it depends what side of the fence you're on.. Buyer, vendor, tenant. I've worked with plenty but it always seems to be the ones that nobody has heard of that do the better jobs. Perhaps the bigger mainstream agents take on too much and they are spread pretty thin? Go into any negotiation thinking everyone is out to screw you and you've already started on the wrong foot.

  • 

    Mad Max on 14/05/2016 - 09:59

    +1

    I get all of the opinions above, but I still do not understand why people do not have a go at selling their property themselfs.
    Gamechanger mentions that "people still employ the service of an agent because they don't have the skills in (1) Negotiation and (2) emotionally attached."
    I do not agree with the fact that people don't have the negotiation skills. Especially this OZbargain crowd…most are masters at it…and there are same clever people here.
    The "emotionalky attached" could actually be a benefit. Who can be more passionate and describe the qualities of a home better than the owner?

    • 

      GameChanger on 14/05/2016 - 10:22

      Your last sentence is the emotional part most people can't get over. Potential buyers will not like the bias and well just like anything a 3rd party opinion holds more weight.

      Some houses sell themselves but others are such a long drawn out process, most people don't have the time. Also I believe agent fees are deductible on investment houses.

    • 

      Penalty boxer on 14/05/2016 - 11:45

      +2

      Yeah I'm actually in the process of selling one of my own properties and to be honest I am doing a pretty horrible job in comparison to the others I have been commissioned to do.

      I think own ridiculous expectations has resulted in doing some damage to the final price!

      • 

        GameChanger on 14/05/2016 - 13:30

        Yeah its hard to detach yourself from your house and in most cases a persons home is their largest asset.

        What you might think is perfect, another buyer might find that the worse characteristic of the home. Its amazing how pride can get in the way and blow up a good deal when you look at it purely from a fair value stance.

        Are you trying to build a startup that removes the human element? Or one that connects sellers with buyers?

      • 

        Penalty boxer on 16/05/2016 - 11:01

        @GameChanger:

        The overall goal is to reduce the cost and complexity of selling real estate. The idea I'm currently testing is by running a real estate agency which charges less per sale, with lower overheads, process automation and an online platform which provides the sellers with full transparency of what is happening.

      • 

        Euphemistic on 16/05/2016 - 11:45

        @lostix: good luck to you if that is what you are planning. There are more and more agencies coming up with ways to reduce the costs of selling, I think they recognise that a straight percentage of sale price is getting a bit high for the work that is done, particularly in a sellers market. Our agent earnt something like $15k for about a weeks worth of listing on our last house. Where he earnt some of that money though was in the lead up, helping us find a property to buy before we sold over about 9months.
        The overheads are changing for agents too, often working by mobile, Internet and car rather than having multiple flash offices, glossy brochures and newspaper advertising.

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  dp1 on 14/05/2016 - 10:50

  Can I ask a general business question to current and former agents. I sold my flat in the UK in 2003 for the equivalent of $175k and paid just over $2000 in agents fees. I sold the next house in 2008 (different city 500km away) for about $400k with $5500 fees. What do you do in Australia to justify a 5-10 fold higher fee? Current house in Perth will be lucky to break $600k if prices keep falling yet $25k fees seems to be the market average

  • 

    solpiry on 14/05/2016 - 13:31

    I agree. The fee here is ridiculously high compare to other countries. Regardless successful sale or not they still charge the fee anyway. There's no much risk for them to lose. Most buyers use a few the most popular websites but those websites are not open to private sellers only through agents.

    • 

      dp1 on 14/05/2016 - 14:45

      Yes, UK agencies have managed to build huge successful businesses despite historically lower fees. 'No sale no fee' was standard practice since the late 1980s.Rightmove was up and running several years when realestate.com.au was in its infancy. Can't see why it's so much more expensive, and based on overseas figures it's an industry where a lot of fat could be trimmed with no detriment to the service provided

      • 

        Penalty boxer on 16/05/2016 - 11:03

        I wish I knew more about the UK dynamic. All I know is that the barriers to selling real estate are quite low in Australia (5 day course) and Australia's transaction volumes are 3x less than in the UK.

        Fees in Australia are generally 2% of the sale price + marketing which can range from $5-10k for a $600k house.

      • 

        dp1 on 17/05/2016 - 12:10

        @lostix: UK fees always include marketing, you can negotiate with some agents for a sliding scale depending on price achieved but usually 0.8% to 1.25%. Houses are generally cheaper (except London) as well so the actual value of the fee is massively lower.
        If you have an agency board on your house you are advertising their company for free, they benefit equally from this. Do Australian agents charge extra for the board outside?
        I don't think the UK has a real estate 'licence' as such, you can just rent an office and call yourself an agent. They seem to do very little for the money- inspections are usually one-to-one done by the homeowner themselves, very few home opens. Solicitors do all the hard work and their fee is usually about 1/3 of the agent's fee (ours charged 645 pounds -$1300 -for the 2nd house I mentioned above)

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  Pumpkin_rrr on 16/05/2016 - 11:23

  I have sat in both sides of the fence and here's my short comment.

  We live on a very nice street, not many houses for sale as people dont leave. Whenever there's a sale came up, it'd be snapped up in less than 2 weeks. Last year an Owner from across the road did a Private Sale. Very capable young man with young family, and both sides of grandparents are handy people who helped them with the reno. As friendly neighbour we attended the Open Home. Nicely presented, nothing to complain about really. He did a very good job: Ads, signs, . Me and hubby thought it should sell within a week. Then a week passed, 2 weeks and after several weeks, a local Agent sign was up, and then sold after half a dozen offers. We dont know what's the story there.

  You know the pros of Private Sale, so I'll just speak of the cons:
  - buyers dont feel comfortable dealing with Owners directly for a whole list of reasons.
  - when they do, they hope your price will be reduced by the amount of the (perceived) commission of at least $10k. And they will haggle
  - generally an ordinary Owner would not have the "holistic" view of a certain area.
  - after sale and upto settlement stage.

  I also hope the OP can elaborate on what you meant by "lack of transparency and efficiency in the whole sales process" and "the costs are really high.". I think the key is to find the right Agent.

  • 

    Penalty boxer on 16/05/2016 - 11:34

    Cost: Agree the right agent helps, but at the end of the day 2% on a $1m property is $20,000 which I feel like is a bit ridiculous to pay given what actually happens (agents here will say that a good agent can return $100k over another agent so that doesn't matter, but really if they all worked to the same rhythm off it doesn't make a difference + it still amounts to ~$500-1000 an hour for their total services).

    Transparency: Sellers don't really much of a glimpse of what buyers are asking and saying about their property (but-for what an agent tells them). You might as well circumvent this by allowing sellers to easily view what the feedback is about their property during a campaign. This is meant to happen in practice, but with the addition of technology it is simply easier to achieve.

  • 

    Mad Max on 16/05/2016 - 17:55

    Agents fees in QLD are 5% of the first $18,000 + 2.5% of the balance.
    A $1M house sale would cost $25,450+GST= $27,995.
    I think the problem is not with the seller. A lot of people would have the skills to do it.
    It has more to do with buyers "buyers dont feel comfortable dealing with Owners directly for a whole list of reasons".
    Why?
    I would not have a problem dealing with the owner. And yes it would be fair to split the fee saved in 2.

    • 

      Pumpkin_rrr on 17/05/2016 - 08:12

      There's no set fees in commission now. It's all negotiated although many still use the old REIQ rates.

      I'm just making a generalised statement; some buyers don't feel comfortable negotiating directly with the sellers, maybe they are shy to negotiate, maybe they don't want to tell the seller in their face that their house is not so nice. … just human nature. I've heard of people who said they won't deal with private owners 'because they don't know what they're doing', 'they ate tight'… Of course they are people who say the opposite.