1% commission real estate agents

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#1818819 10-Jul-2017 13:46

McNulty:

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?

From what I have seen, these low commission agencies seem to have a high rate of failure.

How long have they been around? You could always try them out, then swap to another agent if it doesn't work out.

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surfisup1000

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#1818821 10-Jul-2017 13:47

McNulty: 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

My mother had a valuation done on her Auckland rental property, and it sold shortly after for 200k above the valuers valuation.

I realise it is just one example, but how does a professional valuer get things so absolutely wrong!! Even the real estate agent gave a better up front valuation.

McNulty

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Master Geek

#1818825 10-Jul-2017 13:49

They're quite popular in Christchurch and have been operating for around 10 years. The agents are all licensed etc

sen8or

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#1818826 10-Jul-2017 13:50

Agents are typically paid around 1/2 of the commission with the other 1/2 going to the branch for opex costs etc and profit for the head office, so a $400k sale will yield a normal agent around $8k and the office $8k assuming 4%.

No idea how the 1% commission outfits go, 1% of $400k is only $4k, then if its 50/50, then only $2k to the agent. They would have to do a high number of houses to earn a crust, either that, or get their feet wet in the low commission game, get a name for themselves and a database of contacts then move up to the higher end.

Sen

Wheelbarrow01

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Chorus

#1818856 10-Jul-2017 14:03

As a buyer, I previously found Total Realty to be unscrupulous (if not downright dishonest) with their advertising, sailing very close to the wind ethically speaking. They tend to advertise with "Buyer enquiry from $x", where x is not anywhere near a dollar figure that the vendor is willing to accept, but this ploy does have the benefit of getting a lot of people to go to the open home, thus making the vendor feel like there is a lot of interest in their home.

As an example, a couple of years ago I went to an open home for a property I was interested in as my own home. It was advertised as "Buyer enquiry from $x", and it seemed that half of Christchurch turned up to the open, most likely because the advertising made it seem like a bargain. It was the first open home since being listed, and 30 minutes after viewing it, I called the agent and advised him to come to my place so I could sign an offer for purchase. I knew interest was strong, and I had been looking for a new home for a long time, missing out on many properties due to the competition in that area of town, hence my haste to get an offer on paper.

The agent duly came around to my house immediately after the open home and we signed my offer, which was significantly higher than the "Buyer enquiry from" figure (some $30k more), and the agent then went to see the vendor to present the offer.

The vendor did not accept my offer, and their counter offer was another $50k - so in total $80k over the "buyer enquiry from" figure. I told the agent to stick his house, and I made it very clear what I thought of Total Realty's marketing tactics.

A few days later the agent called me back and tried to blame the vendor for the "misunderstanding", saying that the husband & wife vendors had differing price expectations and that this led to confusion with the advertised price which he said was therefore incorrect from the outset. He then asked me to reconsider trying to meet the vendors' price expectations by making a new higher offer, which I declined.

A few days after that, the agent called me again to advise that the vendors had thought about it and had decided that they would accept my original offer. I told the agent that I had withdrawn my original offer on principle, and therefore I no longer had interest in the property at any price, and I further suggested that he start marketing the property honesty.

I followed this up with a letter to the agent, with the agency owner CC'd in. I received a reply - again blaming the vendors for a price mix up - and advising that the price expectations were now being correctly advertised. When I checked online, I noted that the "buyer enquiry from" figure had risen and was now above the offer that I made.

So no, based on my own experience, I wouldn't ever buy through Total Realty, and I certainly will never sell through them. Not my own family home (which I eventually secured through a reputable agency) nor any of my rental properties.

Pay peanuts, get monkeys.....

BlinkyBill

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#1818863 10-Jul-2017 14:10

You don't need to pay any particular percentage. About 10 years ago I paid 1% for the first 'x' and 8% for anything over 'x'. My rationale based on the Agent's assertion that she could get top dollar was I should incentivize her accordingly.

National agency, but they made me sign a confidentiality clause, so I can't name them.

I also declined their offer to pay establishment or marketing fees, other then direct disbursements at no markup.

Agents want your business, and everything is negotiable. However, it may be more difficult to negotiate on a buyers market or for harder-to-sell houses.

mattwnz

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#1819023 10-Jul-2017 18:36

I wouldn't go for any agent that charges a percentage these days, as it doesn't reflect the actual time and effort put into selling the property. Instead I have used 200 square which charge a fixed fee. It is more DIY, but you can pay more to have a more full service service. Considering the vast majority of buyers are searching for properties online, that is likely going to be the best area to spend your money.

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#1819075 10-Jul-2017 19:24

mattwnz:

I wouldn't go for any agent that charges a percentage these days, as it doesn't reflect the actual time and effort put into selling the property. Instead I have used 200 square which charge a fixed fee. It is more DIY, but you can pay more to have a more full service service. Considering the vast majority of buyers are searching for properties online, that is likely going to be the best area to spend your money.

Trouble is, you want them to work for you, as opposed to can't be bothered working for you.

I've found a husband and wife in Total Reality Chch and found them to achieve pretty good sales prices.

You don't have to take offers! But IF you don't take offers, there is also a chance you will regret it. The agent brings you the offers, it's up to you to accept decline or negotiate. Note if you negotiate the agent has to get an answer otherwise they go home empty handed.

mattwnz

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#1819079 10-Jul-2017 19:33

Batman:

Trouble is, you want them to work for you, as opposed to can't be bothered working for you.

I haven't found that from my experience. From my experience, agents are ultimately working for themselves. Also I don't like the added pressure they put on you as a seller, as they have an incentive to wrap up any sale quickly. I just use them to handle the negotiation, as that is where their strength is.

cadman

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#1819181 10-Jul-2017 21:05

tdgeek:

Now, there is little need for them to haggle for their customer. the seller, as 1% is 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

But just turning them over is what the 4%ers do anyway. And 4% on an extra $10k isn't much worth worrying about making either.

tdgeek

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#1819199 10-Jul-2017 21:34

cadman:

tdgeek:

Now, there is little need for them to haggle for their customer. the seller, as 1% is 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

But just turning them over is what the 4%ers do anyway. And 4% on an extra $10k isn't much worth worrying about making either.

$4000 is real money. The 1%ers might waste a little time to get an extra few thousand @ 1%. The 4%ers will make an effort to get the best price.

We sold a place a couple of years ago, a lot of effort went in, lots of data, open home etc. Compared to my late Aunties I sold a few years earlier at TR, it was in and out. Lucky me, it sold just like that. Or the first half reasonable offer sold like that more like it. And I got the hard sell, or shall I say, the hard buy, that it was a good offer. We know an agent at one of the big name companies, they have a lot of data and a lot of contacts, they expose the property to a lot more people.

Are turning them over, f your getting a small return you cant afford to have it too long and be spending time on it.

tdgeek

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#1819201 10-Jul-2017 21:39

mattwnz:

Batman:

Trouble is, you want them to work for you, as opposed to can't be bothered working for you.

I haven't found that from my experience. From my experience, agents are ultimately working for themselves. Also I don't like the added pressure they put on you as a seller, as they have an incentive to wrap up any sale quickly. I just use them to handle the negotiation, as that is where their strength is.

Good points. The key is to not be pushed around, when you get given an offer that your not happy with. If you can nail that and stand fast, thats the hurdle over. Negotiate? Oh yes. Fridge to an Eskimo stuff for sure

cadman

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#1819267 11-Jul-2017 00:06

tdgeek:

cadman:

tdgeek:

Now, there is little need for them to haggle for their customer. the seller, as 1% is 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

But just turning them over is what the 4%ers do anyway. And 4% on an extra $10k isn't much worth worrying about making either.

$4000 is real money. The 1%ers might waste a little time to get an extra few thousand @ 1%. The 4%ers will make an effort to get the best price.

4% of $10k is just $400.

tdgeek

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#1819292 11-Jul-2017 06:31

cadman:

tdgeek:

cadman:

tdgeek:

Now, there is little need for them to haggle for their customer. the seller, as 1% is 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

But just turning them over is what the 4%ers do anyway. And 4% on an extra $10k isn't much worth worrying about making either.

$4000 is real money. The 1%ers might waste a little time to get an extra few thousand @ 1%. The 4%ers will make an effort to get the best price.

4% of $10k is just $400.

Oops

tdgeek

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#1819294 11-Jul-2017 06:39

So your saying that they all just turn them over?

House sells for $500,000 one gets $20,000 the other gets $5000 thats more my point. Why would anyone use 4%ers? The perception is they will do more and get more. Far higher access to buyers, etc. We sold a flat, at auction, by one of the big names. Reached 389. Auction stops, so they talk to the bidder. 405. No, so they talk again, I wont get much more, hopefully 410. Got 430. The 1%ers wont negotiate like that as they are only getting a quarter of the whole deal, they want to flick it and move to the next one. They also wont have access to the numbers that Harcourts and Ray White will. And going by the extensive data we got on sales in our area, which wasn't just a list on A5 paper, they wont go to that detail either. All IMHO, and from my limited first hand experience.

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