Real Estate Fees – Friend or Foe?


My partner and I have sold many properties over the years and have used a myriad of different Real Estate Agents. Each Agent came to our home with similar style: walk through the property, appraise the property and then with much persuasion from us would disclose the cost of selling with their Agency. It was not a simple exercise. The fee conversation would go something like this:

Agent:  

“Our commission is 2% excluding GST.”

Us:   

“Is there room to negotiate because according to our calculations that is a $17,600 fee to sell an $800,000 home and does this include marketing?”

Agent:

“Our commission structure is based on the premium service we offer and whilst you may pay an additional premium compared to another Agent we will provide you more money in your pocket from the additional sale price we will achieve”.

Pretty much without fail, each Agent would say the same line. Then to complicate matters further, there would be the administration fee, marketing fee, form 1 fee and Government searches. These additional charges usually totalled another 1% of the property price. On $800,000 this equates to an extra $8,000.

None of this was provided in a simple to understand table. Figures were distributed in the same orderly fashion as people trying to board an EasyJet flight. We have been in the situation whereby some of these figures have not even been provided until it was time to sign the Sales Agency Agreement. For the last property we sold, valued at $800,000 the total cost from three Agents ranged from $20,000 to $36,000!

My partner and I would always wait before choosing an Agent to give us time to interpret the labyrinth of different fee structures. Often during this period, an Agent would call us back and suddenly be in a position to negotiate their commission. My brain is now rethinking the conversation in the living room: “Does this mean the more money on sale will now be out the window because they have reduced their commission?”

shutterstock_325157468None of this made sense. It got me thinking; if a Real Estate Agent is a true professional, no matter what they are paid, their job is to get you the best price for your property. In my simple world this is their job description.

For many years I was employed in finance as a CPA, specialising in superannuation. The company I worked for charged a fixed fee for service, it didn’t matter if you had $10,000 in super or $2 million dollars in super. The fee for service was based on the time spent to do the work. It got me thinking, “Why is this not the same for Real Estate?” I spent some years studying Conveyancing, to ensure I really understood property law and then obtained my Land Agents License with a view to making life simple for anyone looking to sell. Over the last few years I have been employed by large property developers and sold many properties. I wanted to be sure I understood all there is to know about selling real estate before launching the business model for SA Listings.

The business model is simple. We provide a full real estate agent service at an easy to understand, all-inclusive fee from $3,888 for land and $7,888 for house and land. We are Real Estate professionals not driven by incentives.

Eight years in the making, salistings.com.au now provides a simple fixed fee model in South Australia for anyone looking to sell.

Justine Thomson

Author: SA Listings

SA Listings provides a full real estate service through an innovative business model with a choice of fixed price all inclusive packages. Whether you are a seller, buyer, builder or developer we can help maximise your property returns and save you money.

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