It is abundantly clear that the local property market is now firmly on the sellers’ side. Queues at Home Opens are common, supply of quality homes for sale is falling, transaction numbers are up 50 per cent on this time last year and average time on market has retreated to below 30 days.
The fierce competition from buyers is pushing up prices too. A Fremantle apartment that sold a year ago for $225,000 just on-sold for $280,000.
In these market conditions, competition amongst agents increases and downward pressure on commissions often results with desperate agents offering lower fees to secure listings.
The cost of a proper real estate service is relatively substantial in dollar terms albeit small in terms of percentage of the selling outcome. Sellers, despite being pleased with the sales outcome, can sometimes feel aggrieved that their agent’s fee is disproportionately high where the sale is negotiated after only a day or two on the market.
The idea that the agent “got a big fee for a few days’ work” is flawed thinking. Would the seller have preferred to have endured dozens of Home Opens, risk their property stagnating on the market and underselling for the sake of feeling better about their agent earning their commission? Surely not.
A key point is that the agent’s job is not done at the completion of the sale contract; they are obliged to see the deal through to settlement and carry much of the risk through to that point.
Before the agent is appointed, they have developed a range of skills, experience and expertise that they apply not just at the point of negotiating the actual sale. Advice around preparing a home for market, maintaining a data base of qualified buyers, marketing acumen, communication skills and in-depth market knowledge bonuses from visa deposit are all part of what sellers pay for. In appointing your agent, you are buying expertise, a suite of skills. You are not just buying an agent’s time to write the contract.
In my experience, choosing your agent based on the cheapest fee offered usually results in poor communication, ineffective service, bland marketing and a low selling price.
Sellers ought to settle on the agreed fee at the point of listing and remember that the agent’s job is to achieve a sale in the shortest possible time for the highest price the market will bear. How long that process takes is irrelevant relative to the agreed fee.
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