Estate agent commissions - negotiation on %?

[Sideshow Bob]

7.5% is a lot.

If I'm ever selling my house, I'm doing so privately

Advertise on private properties if you have time to show the house to different people. There is no need to have estate agent although I am aware that most of them are poor and need money to buy bread etc. With 7.5% commission, that is lot of bread though.

 

[Sideshow Bob]

Hi All,

Currently looking at selling my house in the east of JHB. Got the proposal from the estate agent and they are asking 7.5% comm ex vat.

From experience out there, is this the average comm or what would be reasonable, seems very high to me?

Yes, if you cut estate agent out, that is 0%.

 

[Datura]

Sold our home recently and commission was negotiated based on the offer price we got.

Also take note - the commission is VAT excluding. Don't let the extra 15% be a nasty surprise when it comes to the final payout.

Yep. I was like, hold the fup!

 

[The_Ogre]

Yep. I was like, hold the fup!

I didn't know about it either. When I got the statement of account from the attorneys, I noticed it for the first time. However, once I looked at the nett profit I've made, I thought fsck it, that's small change in comparison

 

[RandomGeek]

Knock them down to 5%, and don't give anybody an exclusive, open-ended mandate. On the other hand don't use 20 agents too. use 2 or max 3 who are active in your area

 

[Desig]

I have never used an agent before!

 

[zerocool2009]

I bought in June 2020, comm taken was 0% stated on the OTP. (I was happy to see that). Buyer got the max and I got a bargain.

Every sent counts when buying property.

 

[beefymoocow]

I bought in June 2020, comm taken was 0% stated on the OTP. (I was happy to see that). Buyer got the max and I got a bargain.

Every sent counts when buying property.

When I buy properties I like to negotiate the sellers commission. If it’s small/medium agency. I’m able to pay the sellers commission in return the agency gives me the commission paid as credit for rental management and finder fees for tenants.

Then I ask for a lower discount from the buyers. Oh and I have about 5 properties so the credit gets amortized over these properties.

I don’t have time to manage the properties myself so it’s a sunk cost.

 

[Skywalker786]

You can sell privately, but advertising is the main thing. I know a couple of people now who have sold just with word-of-mouth, never even bothered to take pictures or post online. So it can be done.

I guess it depends on where you are. I get estate agents phoning me at least twice per month asking if I would like to sell. I suspect if I were to list on Private Property I'd get responses fairly quickly.

A while ago while I was looking for houses, I noticed that Eazi has a fairly attractive model, they have a flat rate of ~R40k IIRC, which in my mind is a very reasonable price for the amount of actual value added.

Sure, an estate agent adds value, but property is getting so expensive these days that 7.5% of the average selling price of a house ends up being a crapton of money. Also I've seen some listings where the agent was clearly incredibly lazy - poor quality photos, complete lack of information, not helpful at all. So I can completely understand why someone might try to sell privately.

There was a thread on this a few years ago - I can't seem to find it now, but one forum member put together a bit of a how-to.

You have to sit and decide what approach works best for you. Simply put, thats why some one chooses to buy a Datsun vs Mercedes Benz, or shop at Woolworths vs the local corner shop.

 

[bwana]

if you are a patient and good sales person it might be a good experience/challenge for you.

Humility usually is.

 

[marco79]

When I sold a few years ago the agent charged 7.5% excl VAT. We listed the house 10% more than we wanted. The 2nd viewer he brought bought the house. We accepted an offer of 5% lower than advertised.

I had 2 other agents who brought people for viewings and they always tried to negotiate lower prices. Up to 20% lower, some even wanting to go behind the agents back for a private deal.

If you have the time, try to sell on your own. But don't mess around with agents who wants to bring every Tom, Dick & Harry for a viewing.

 

[deesef]

A big problem regarding agents cost relates to the fact that the market is flooded with estate agents. So many kids who can't find work end up accepting a "commission only" package from one of their local Estate Agents. Unfortunately, the housing market is not a bottomless pit, so on average each agent sells 1 property every 3 to 6 months, sometimes even less. The commission needs to keep the Agency in funding and provide salary for the poor agent, who will likely only sell another property a number of months later.

 

[Barbarian Conan]

I found the east rand highly NON negotiable.

But as an estate agent myself. I am very happy to negotiate my salary on presentation of an offer. Average around 5 to 7.5%

My suggestion is interview a few of the prominent agents in the area and find one agent you trust and negotiate the rate with them.

In my limited experience, that's how it works. You sign on for full 7.5% (pretty much what I paid), and in the contract it will state that you can negotiate if they bring in an offer of less than your asking price.

 

[Skywalker786]

Be cautious and ensure that it is stated in writing that you can negotiate a reduced com if the price is lower. Some unscrupulous agents will hold you to the 7.5%

 

[JibbersCrabst]

In my limited experience, that's how it works. You sign on for full 7.5% (pretty much what I paid), and in the contract it will state that you can negotiate if they bring in an offer of less than your asking price.

Your mandate would in any event protect you in such a case as you wouldn’t be obliged to accept any offer lower than what you agreed to in the mandate.

If you accept an offer lower than the mandate, it would essentially amount to a new mandate (as the agent didn’t get the full price) and therefore the commission can be renegotiated in the ‘new’ mandate.

I’ve recently listed a property with an agency on the east rand at 5% comm ex VAT.

 

[newby_investor]

A big problem regarding agents cost relates to the fact that the market is flooded with estate agents. So many kids who can't find work end up accepting a "commission only" package from one of their local Estate Agents. Unfortunately, the housing market is not a bottomless pit, so on average each agent sells 1 property every 3 to 6 months, sometimes even less. The commission needs to keep the Agency in funding and provide salary for the poor agent, who will likely only sell another property a number of months later.

Surely a flooded market would have the opposite effect, i.e. driving the prices down? What you describe is not really how markets work.

 

[Brieuse]

In my limited experience, that's how it works. You sign on for full 7.5% (pretty much what I paid), and in the contract it will state that you can negotiate if they bring in an offer of less than your asking price.

Just be upfront with them, for them it's their income, and some of them actually work hard for it. Tell them what you need to get out of the sale.

We recently sold our home and did that sliding scale thing down to min 4.5%

 

[EMAM]

I was upfront with my agent from the beginning.
I told her exactly what I wanted out, after commission.
She brought me an offer which was slightly less, so I made her drop her commission accordingly.
I got what I wanted and she got 4% plus vat.
Nothing is set in stone when it comes to commission.

 

[Claymore]

Hi All,

Currently looking at selling my house in the east of JHB. Got the proposal from the estate agent and they are asking 7.5% comm ex vat.

From experience out there, is this the average comm or what would be reasonable, seems very high to me?

Our agent said we could choose the commission based on how well he did, and told us what most people gave him. He sold our house in 3 days at asking price. We gave him 7%, more than we had planned, but he did a great job.

 

[neoprema]

my last house had an open mandate. A big well known estate agency wanted 5% and I got a one-woman show estate agency too and she wanted 4.5%

The big company stuffed up the entire listing, never even brought anyone.

The one woman show sold my property in 3 weeks with multiple viewings…
She deserved every penny of that comm.