1% commission real estate agents

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McNulty

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#216724 10-Jul-2017 11:48

Looking to sell in Christchurch where Total Realty is quite disruptive to the Real Estate market in that they only take 1% commission.

Anyone have any stories (good or bad) to share about Total Realty in particular or 1% agents in general?

I've spoken to Total Realty and other "4%" agencies already. While the other agencies seem a bit slicker they would have to sell my house for an unrealistic amount to make up the equivalent of 3%. I'm no expert but in the current market I doubt that even the most talented agent could "push" the price up by 20k.

All the agencies seem to use the same sources for their valuations and they've all come back with the same estimated sales price range. In addition to that ALL buyers I know are looking on TradeMe/Realestate.co.nz and sorting by Price so I don't think I should care if the other big agency has 500 offices around the country or whatever.

My main concern is that the 1% agencies will want to take the first lowball offer, but again, maybe (lower offer x 1%) > (higher offer x 4%)

My other concern is that the 1% agent might not be very good and might mess up the paperwork or something, but they are properly licensed etc so maybe that isn't a valid concern.

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#1817757 10-Jul-2017 12:03

Not sure about other 1% agencies, but Total Realty seem to be pretty professional and have good systems in place. That's based on my experience of attending multiple open homes and doing due-diligence on one of their listings (arranging time for engineer to do assessment etc). Certainly no perceivable difference between them and the 4%'ers.

Of course, those that have completed sales with them will be better qualified on the matter than myself

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kingjj

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#1817762 10-Jul-2017 12:05

We brought our house through Total Realty in Chch and the agent was most certainly looking for a quick sale. He pushed the seller to accept our offer the day we gave it and subsequently received a higher offer early the next morning (there was a lot of interest and to my knowledge at least 3 couples looking to make an offer). Was great for us, did feel for the seller though. We low balled initially expecting a counter offer but the agent seemed most happy with our offer and that fact that we were cash buyers with few conditions.

Have never sold through Total Realty but we would certainly be getting independent advice if we did to make sure any offer was fair and reasonable and no just the first.

Edit: to add, we would look at selling through Total Realty as the dealings we had with them were good and no different than through Harcourts.

MikeAqua

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#1817763 10-Jul-2017 12:06

I think it comes down to: -

1) What marketing do you get and for how much?

2) What is your individual agent like?

Mike

McNulty

152 posts

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#1817768 10-Jul-2017 12:13

The marketing I've been offered is nearly identical in price and content.

The specific agent I'm talking to is good. I spied on a few open homes in my area. Did see some other Total Realty agents that I wouldn't go near.

sen8or

1768 posts

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#1817769 10-Jul-2017 12:15

Do your homework on what you believe your house is worth, look at comparative sales in the area, go through open homes etc and decide what range of prices you are likely to be happy with. Armed with this information you will then be able to gauge whether or not the agent is doing their best for you the vendor or for themselves to get some quick / easy commission.

Real estate can be a fickle game, so much depends on who turns up on the right day as to whether or not vendors win or lose.

Depending on where you are in Christchurch, also check the quantity of housing stock in the local area. Im in Lincoln where there are currently 4-5 different subdivisions all on the go at the same time and whilst the cost of building isnt cheap, and the thought of building may put some off, there is a lot of competition to compare homes against so existing houses are struggling a bit.

McNulty

152 posts

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#1817770 10-Jul-2017 12:15

@kingjj but the seller did not have to accept. That's on them but a pushy agent doesn't help

trig42

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#1817772 10-Jul-2017 12:16

If your house is priced right, and in a sellers market I don't think it will make a lot of difference.

In a full market, or with a house that is a bit different, then you'd want to get it in front of as many buyers as possible. This is where the marketing comes in. If a 4% has better marketing, and can get it in front of the buyers that need to see it more effectively than the 1%'er then there is your difference (and the difference in selling price too).

I have no experience with a 1%er, but have successfully negotiated a commission downwards to meet a price with a 4%er.

My only advise when selling is usually (and it was in all of our sales) the first offer you receive will be the best.

tdgeek

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#1817778 10-Jul-2017 12:37

kingjj:

We brought our house through Total Realty in Chch and the agent was most certainly looking for a quick sale. He pushed the seller to accept our offer the day we gave it and subsequently received a higher offer early the next morning (there was a lot of interest and to my knowledge at least 3 couples looking to make an offer). Was great for us, did feel for the seller though. We low balled initially expecting a counter offer but the agent seemed most happy with our offer and that fact that we were cash buyers with few conditions.

Have never sold through Total Realty but we would certainly be getting independent advice if we did to make sure any offer was fair and reasonable and no just the first.

Edit: to add, we would look at selling through Total Realty as the dealings we had with them were good and no different than through Harcourts.

Same here and in ChCh, sale for a deceased estate I was managing. Got an offer, they came over, and there was a definite push on it to take it. As this house, was in a weird shaped land, and on a really busy road, and not the best part of town, I took it. Now, there is little need for them to haggle for their customer. the seller, as 1% os not much, best to turn em over. If your a 4% er, then thats worthwhile to get the best price for the seller, and them. My 2c worth

kingjj

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#1817779 10-Jul-2017 12:41

McNulty: @kingjj but the seller did not have to accept. That's on them but a pushy agent doesn't help

Agreed. But considering the market at the time (there was over 30 people through the first and only open home and 3 offers were eventually received within 2 days) I would have expected him to advise them to wait a day or two for any other offers. We chatted with the sellers a few days after our offer was accepted and they were a bit peeved that they followed his recommendation to accept our offer, more fool them I guess.

We had earlier put in an offer for another house via Harcourts and they kept us going back and forth for several days as they were expecting another offer. Sure enough a second offer came in so it went to a multi offer situation. We walked away when the asking price jumped 15% as soon as it went multi offer.

kobiak

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#1817781 10-Jul-2017 12:41

I'd also check minimum fee in contract. 1% sounds good, but in AKL a lot of agencies will charge 12k+gst as minimum

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McNulty

152 posts

Master Geek

#1817793 10-Jul-2017 12:59

@kobiak the minimums all check out OK, nothing close to 12k more like 4k minimum from memory.

Their admin fee is also around $500, same as all the other agencies.

SJB

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#1818782 10-Jul-2017 13:16

When I lived in the UK all commission rates were around 1-1.5%. That included all the normal marketing streams and, in my case, a folder describing the house rather than just a flyer.

I never understood why they were so high here.

McNulty

152 posts

Master Geek

#1818787 10-Jul-2017 13:20

This is a stock standard house in a suburb full of similar houses. No special audience of buyers is required.

I also have plenty of recent sales data from around the neighborhood so I feel like I'll know what a fair offer looks like.

In this situation I'm really struggling to see what the 4%ers will bring to the table to make up that 3% difference and still see me as the seller better off.

Still looking for some more anecdotes though, especially from sellers side.

Agents feel free to chime in also

nickb800

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#1818791 10-Jul-2017 13:27

Given that you're looking at saving $12,000 of commission on $400,000 house (for example) by going with Total Realty, then you could get a proper valuation done for $500-1000, to ensure that Total Realty don't go with a quick/low sale, and you'd still be better off. You could be open with the agent and say you're looking for X, backed up by a valuation, or keep it secret and use it to decide whether to accept an offer or not.

Although agents at high commission agencies have slightly more incentive to get you a better price, it's still in their interest to get a quick sale and move onto the next listing. That marginal $10k might mean a lot to you as the vendor, but 4% of that less whatever the agency takes isn't really worth the individual agents time to drive back and forward between vendor and purchaser with counter-offers.

McNulty

152 posts

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#1818807 10-Jul-2017 13:41

Are valuations worthwhile in the Internet age? Sales figures are published monthly and they are easy to get hold of. I understand using valuers for strange and quirky properties but not for common suburban houses

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