1% commission real estate agents

6 months has passed so I've decided to give an update for anyone reading this thread in future.

Ultimately we decided to use the 1% agent (Total Realty) and we had a great result.

One thing I will note up front is that I credit the individual agent more than the agency. The same agency had some people working under their banner that I wouldn't let anywhere near my home, although I would say the same about any other agency - choose an agent, not an agency.

As mentioned, we met with a couple of different agencies (both specialists in my location). Of course the 4% agent promised better results, more potential buyers because of their large network, better marketing etc etc. The 1% agent argued that their prices are low because they don't need to support the exec salaries and overheads associated with a large national chain. At the end of the day, with the 2 sets of paperwork in front of me there was almost no difference in the 2 offerings (the 4% agent had a small amount of additional advertising avenues but both agents covered all the same "main" advertising i.e realestate, trademe, property press etc). The 1% agent also suggested that "the buyers will pay what they will and you can't fight the market forces with a bigger banner". Remember this statement because it will be relevant later.

I then asked both agents for their recent sales figures (advertised price vs actual result). Surprisingly, they both were happy to provide this info without hesitation. A quick spreadsheet revealed that the 1% agent was having slightly better results. (As an aside: After a bit of extrapolation from me, I was also able to estimate that both agents bring in roughly the same personal income each year, and their income is more average than some people might think). I also used the spreadsheet to confirm what I already knew: if the 4% agent got me a fantastic price and the 1% agent did an average job then they'd be about equal. I the 1% agent did anything better than an average job then I'd be ahead.

As mentioned in the original thread, I wanted to go with the 1% but my wife wanted to go with the 4% agent as she had a better sales-y personality which I'll admit is important in selling, so I tried my best to work with them. I decided to see if the 4% agent would come down re their commission. I tried a couple of different tactics mentioned by others in this thread: asking for lower commission from the 4% agent which they flatly refused, citing the much better job they'd do for us and suggesting that it was insulting of me to ask.

I then tried suggesting to the 4% agency a low/high commission structure which would net them an extremely high commission if, and only if, they delivered on their promises (2% commission up to sales price X, 8% commission on anything above X. Where X was nothing unfair and totally in line with their valuation range and 'promises'.) What happened next was a turning point: The 4% agent replied by saying that they couldn't do such a low/high deal because "the buyers will pay what they will and you can't fight the market forces" (not a direct quote but near enough). Thanks, so you admit to charging an extra 3% for no benefit!

At that point we signed with TR and coincidentally our direct neighbors listed with the very same 4% agent the same week. We sold after around 6 or 7 weeks for a good price (not amazing but well towards the higher end of valuation, and well over RV) and the neighbors' house is still for sale several months later, now currently listed with a second 4% agency. There are several differences between the neighboring houses for sure but the ultimate point of the story is that the 1% agent got us a great result, got the job done, and offered a service which was no worse than (and probably better than) the 4% agent. And I saved several thousand dollars in commission.

McNulty

McNulty