Estate Agent fees

marco79

marco79

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Hi all, I need some advice regarding the sale of our house.

2 weeks ago I started advertising my house on Gumtree and a few Facebook for sale groups. I had numerous agents contacting me asking to help with the marketing or they have people looking for houses in our area, etc. I give them the same feedback. They are welcome to bring clients for a viewing but we will not pay any agent commission or any fees.

Yesterday an agent stopped at the house and spoke to my wife. He claims he has someone qualified for R900k looking for a house in our area. Our list price is R950k. He then said he is willing to drop his commission to 3% if his buyer buys the house.

1st problem is I have done all the advertising of the house, and he gains R27k for basically doing nothing. 2nd is ontop of the commission he wants a R50k discount.

Would it be decent of me to ask him to accept 1.5% commission on the sale and lower the house price to R920k? Thus him making R13.8k for nothing. And can I tell him that if this specific buyer doesn't buy the house, that we have no further agreement? The feeling I get is the agents are trying to trick us into agreeing to them marketing or selling our house.

What do agents actually do for their standard commission of 7%? One agent said actually said their standard commission is 7.5% in our area while another agent is advertising their commission is fixed at 2.5% for all of their sales.
 
Ask Malema about those bloody agents!
 
I.am.Sam said:
what if the buyer comes and views ..you slip him a note to contact you privately
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We are specifically talking about the 1 potential buyer this agent brings. I actually think this agent has a trick up his sleeve. He first wants to meet with us tonight to discuss a few things.
 
I.am.Sam said:
what if the buyer comes and views ..you slip him a note to contact you privately
Click to expand...

Illegal and prone for litigation. Rather tell the agent the price you are asking which is already reduced due to private sale and he is welcome to keep commission for any amount over that.
 
marco79 said:
Hi all, I need some advice regarding the sale of our house.

2 weeks ago I started advertising my house on Gumtree and a few Facebook for sale groups. I had numerous agents contacting me asking to help with the marketing or they have people looking for houses in our area, etc. I give them the same feedback. They are welcome to bring clients for a viewing but we will not pay any agent commission or any fees.

Yesterday an agent stopped at the house and spoke to my wife. He claims he has someone qualified for R900k looking for a house in our area. Our list price is R950k. He then said he is willing to drop his commission to 3% if his buyer buys the house.

1st problem is I have done all the advertising of the house, and he gains R27k for basically doing nothing. 2nd is ontop of the commission he wants a R50k discount.

Would it be decent of me to ask him to accept 1.5% commission on the sale and lower the house price to R920k? Thus him making R13.8k for nothing. And can I tell him that if this specific buyer doesn't buy the house, that we have no further agreement? The feeling I get is the agents are trying to trick us into agreeing to them marketing or selling our house.

What do agents actually do for their standard commission of 7%? One agent said actually said their standard commission is 7.5% in our area while another agent is advertising their commission is fixed at 2.5% for all of their sales.
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Who gives a toss about decent.

You dictate to the agent and if he doesn't like the terms show him the door.

My guess is the agent wants to try get you to sign a deal with him, and he actually doesn't have a buyer lined up.
 
Tell him you want R925,000 out - what he gets above that he can keep - otherwise bugger off.

On that note - there is no way in living hell I'd pay 7.5% for an agent to sell my house. In fact - I wouldn't probably struggle with 1%. I don't see why a fee must vary depending on the value of the house.
 
xrapidx said:
Tell him you want R925,000 out - what he gets above that he can keep - otherwise bugger off.
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This. And then if he insists on you signing a standard contract "because it's policy", you know he's a shyster.

Remember you don't sell a house every day, but this guy tries to trick private sellers into signing him on every day.
 
IMO they are worse than tow truck drivers. Work in a firm that does a lot of conveyancing. Can't believe how we have to jump through hoops of fire to keep them happy so the deals keep coming in. Luckily not part of that rat race.

Also battle to justify their commission. OP, I fully understand your reluctance to pay commission. I always ask what justifies the commission on the mid to upper end market, where they sit around a few sundays and make R200k + on a decent sale. 3% is a newish trend, and it is a good deal when compared to the majority of the market at 6-7.5%.
 
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xrapidx said:
Tell him you want R925,000 out - what he gets above that he can keep - otherwise bugger off.

On that note - there is no way in living hell I'd pay 7.5% for an agent to sell my house. In fact - I wouldn't probably struggle with 1%. I don't see why a fee must vary depending on the value of the house.
Click to expand...

I think we should have this approach. We want R910k, the rest would be his commission.

Now that I think of it, an agent contacted me last week and asked if he could add his fee to the selling price. ie advertising for R1m
 
xrapidx said:
Tell him you want R925,000 out - what he gets above that he can keep - otherwise bugger off.

On that note - there is no way in living hell I'd pay 7.5% for an agent to sell my house. In fact - I wouldn't probably struggle with 1%. I don't see why a fee must vary depending on the value of the house.
Click to expand...

Perhaps a nuance - anything above your requested price, he gets to charge an increased fee but you get the residual amount. As opposed to him taking all of the upside above the amount
 
IzZzy said:
Perhaps a nuance - anything above your requested price, he gets to charge an increased fee but you get the residual amount. As opposed to him taking all of the upside above the amount
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Yeah, would go with this as well...

Min price of R925, agent gets R5k.

Anything above that, agent gets to keep 7% of.
 
Yep, its a tough game and there are good and bad one's. Have a family friend who is an estate agent and she struggles. She can sometimes put months of work into a property and see absolutely nothing. Its very prevalent now with owners being unwilling to drop their prices and the market being a bit flooded right now. She had one house where the owners would not budge off 2.5M on a 3 bed house when down the road there was a much bigger and nice place going for 1.9M. She tried to negotiate with the owner and he refused. She put on about 5 show houses did all the advertising etc and could not sell as the price was just ridiculous. Eventually the owner fired her and gave it to a new estate agent but at 1.9M which is what she had been asking for the whole time.

Anyways, long story short is that she can go months without selling a house and after the sale it takes up to 3 months for her to get paid a cent. Its all commission based and is not for the faint of heart. So yes, there can be a lot of work in the background you are not aware of and due to how few sales they get on average they try up the commission. Few people are willing to give sole mandate these days so its very competitive.

Personally I would advertise at 950K, and tell any estate agent that if they can sell for more than 950 they can keep the difference, or 70% of it or something like that. See if they are willing to work with that. Just never sign a sole mandate.
 
Estate Agents are just like waiters - it takes no more effort to carry a R40 hamburger to your table, vs a R250 Fillet, yet they are tipped 10%. I would,however, argue that it is harder to sell more expensive properties, but then the commission should fit the effort and not be a fixed percentage.

My friend paid off her house, by being a weekend estate agent for a year. So yeah...

Lastly, I can guarantee you that they are NOT acting in your best interest. They only want a quick sale and to get their commission. I do not trust "pre-qualified" buyer story. Who says that person will even like your house? A house is a very emotional purchase. Sound like a BS story to me. Rather agree to terms that you are comfortable with, and certainly don't say "I don't care what you sell it for, I just want R925 000" - what if the buyer pays R1m? Let the person make the offer first.

Another anecdote - a rental agent said they had a tenant for us. The tenant liked our place and decided to move in. The agent wanted 8% commission (roughly R10 000). She literally made one phonecall to us and WE showed the flat to the tenant. Told her to get bent and ended up paying her a R1 500 fee to shut up and leave us alone. So everything is highly negotiable, especially when they have very little direct costs/effort involved in the transaction.
 
I.am.Sam said:
what if the buyer comes and views ..you slip him a note to contact you privately
Click to expand...

Risky! If a sale results the Agent can hold you or your buyer liable for a commission because the agent introduced the buyer to your property . Without the Agent the buyer who you slipped a note to would not necessarily have found your property. That said I don't know how Agents can actually enforce this ...or even if they do as the legal route is expensive.

Agents will always try to get a mandate whether sole or joint and saying they have a pre qualified buyer for the amount you are looking for is a pretty common fib.

The 7% fee charged by the big brand franchises doesn't amount to anything. You can negotiate 4% or find another agent
 
TRZ214 said:
Also battle to justify their commission. OP, I fully understand your reluctance to pay commission. I always ask what justifies the commission on the mid to upper end market, where they sit around a few sundays and make R200k + on a decent sale. 3% is a newish trend, and it is a good deal when compared to the majority of the market at 6-7.5%.
Click to expand...

Back in the days when 1 million rand was the expensive end of the home sales market and when average sales were around R300k Agents commission were more justifiable at 4%-7% but that was decades ago and has no relevance on today's prices which same commission structure is literally obscene ...which is why we will see a new estate agency Act shortly
 
TRZ214 said:
IMO they are worse than tow truck drivers. Work in a firm that does a lot of conveyancing. Can't believe how we have to jump through hoops of fire to keep them happy so the deals keep coming in. Luckily not part of that rat race.

Also battle to justify their commission. OP, I fully understand your reluctance to pay commission. I always ask what justifies the commission on the mid to upper end market, where they sit around a few sundays and make R200k + on a decent sale. 3% is a newish trend, and it is a good deal when compared to the majority of the market at 6-7.5%.
Click to expand...

LMAO.....struggles to justify agent fees, yet is from a "conveyancing" firm. Lawyers fees to transfer a home and register a bond is even more of a farce.
 
Have had my house on the market for just over 2 months. Just included a 3rd agency to sell and run showhouses.

Easiest way to set the ground rules: "This is my house and it has all of these features. I want Rx OUT. Are you interested in selling it for me?"

They'll cry, kick and scream, but they'll eventually STFU and take the offer. It really doesn't get simpler than that.

Expecting an offer in writing tomorrow...
 
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