Is this estate agent comm hectic? Your experiences please.

[Ockie]

Hi guys. So I organised one of my clients that has a property agency to send their agents to my sisters place to do a evaluation etc. Long story short I asked her afterwards what is the comm they will be charging....but she did not know so she said she will go look at the mandate they left with her. 7.5%!!! I said to her that seems very high to me and I will get back to her once I asked my friend in Cape Town that is also a estate agent what he thinks. He said that is madness. He would say 5% for a split mandate and 4% for a sole mandate.

I was also talking to my friend in the UK now .. there they basically charge 1.5% comm max!

WTF!!!!!?????

What have your experiences been with agent commisions?

 

[azbob]

If i'm not mistaken, 7.5 (or 8.5?) is the maximum they can take.

I am mistaken, 7.5% is the usual.

 

[Ockie]

If i'm not mistaken, 7.5 (or 8.5?) is the maximum they can take.

I am mistaken, 7.5% is the usual.

The max or the average? My friend said 7.5% is madness. 1.4 million, that = R105 000.00 commision they get from my sister. THAT IS FCKING CRAZY! On 5% it is still R70 000.00 (still a k@k load of money if you ask me) ... but more reasonable I would say.

 

[azbob]

The average, ask MKFrost, I think i saw it mentioned on this forum.

 

[Hamish McPanji]

The max or the average? My friend said 7.5% is madness. 1.4 million, that = R105 000.00 commision they get from my sister. THAT IS FCKING CRAZY! On 5% it is still R70 000.00 (still a k@k load of money if you ask me) ... but more reasonable I would say.

Yup, and the clever ones play both sides, so they will throw in a few thousand rands in admin fees that the buyer has put in.......probably to seal the deal, otherwise they will give property to someone else.

 

[Compton_effect]

7.5% is a bit high.
But you get the opposite too - my wife worked on a sale for 2 months, only to have the buyer say at the last minute that he'll only pay R15 000 commision on a sale of R 1.8 million...
That one was ridiculous.

 

[Ockie]

7.5% is a bit high.
But you get the opposite too - my wife worked on a sale for 2 months, only to have the buyer say at the last minute that he'll only pay R15 000 commision on a sale of R 1.8 million...
That one was ridiculous.

That is just bad manners and low class. Also...the commision is put into the mandate so surely he cant go and say he will only pay R15 000.00 flat once the sale is done?

Also...my sis mentioned to them that we as a family will be looking at buying another property as a investment soon and their eyes lit up and they said they will be happy to help us. But if this is the way they gonna rip us then well....I dont think sooo!

 

[supersunbird]

So she has not signed the mandate yet?

Just phone them and decline the mandate and shop around and negotiate.

 

[Paul Hjul]

Estate agents in SA have a high and fast approach towards making money. 10% commissions on sales are not unheard of and rental business is really done as a side show. In several parts of SA you can see the effects of the way the market is structured - tons of estate agents knocking for a really small trough and pretty much in the same boat as gold panners were in Barberton.

In many other countries the commission structures are a lot lower and the agents sell more property but in SA it is a horrendous rat race that really turns on agents selling 2 or 3 properties a year to survive. Unfortunately the fact that 10% commissions made sense when the costs involved in acting as an agent dispatching a horse to the conveyencer and then another once everything was sealed to the Registrar of Deeds (Cape Town for the whole Cape except for the the King Williams Town area) together with half a dozen telegraphs and dealing with a primative banking system etc ... The mentality is simply wrong - sell a house buy a 4X4 twin cab and wait for the next big pay day.

 

[Ockie]

So she has not signed the mandate yet?

Just phone them and decline the mandate and shop around and negotiate.

Nope....not signed. She putting the sale on hold now anyway as there is a bit of a hold up with the family property now. At least now we know to negiotiate the commision. frekking hell!

 

[ToxicBunny]

7.5% is the maximum commission they can charge if i remember correctly..

I would tell them to get stuffed at 7.5%... 4% maximum, and closer to 2% would be acceptable..
If they want more than 2% they would have to sign SLA's and agreements of performance.

Estate Agents in general are the most useless bunch on this planet. I dealt with my fair share of them when I was house hunting and most of them don't even listen, and just show you all sorts of rubbish that you aren't interested in.

 

[Nerfherder]

Hi guys. So I organised one of my clients that has a property agency to send their agents to my sisters place to do a evaluation etc. Long story short I asked her afterwards what is the comm they will be charging....but she did not know so she said she will go look at the mandate they left with her. 7.5%!!! I said to her that seems very high to me and I will get back to her once I asked my friend in Cape Town that is also a estate agent what he thinks. He said that is madness. He would say 5% for a split mandate and 4% for a sole mandate.

I was also talking to my friend in the UK now .. there they basically charge 1.5% comm max!

WTF!!!!!?????

What have your experiences been with agent commisions?

You basically need to use this against them.

You can have a tiered comm based on the price, I know that the guys who we bought our house from did this.

Give them a price that you want for the house, if they can sell it at that price then they get the full comm. If they want to drop the price then they have to drop the comm as well.

So like the house was on the market for 1,7 mil (7% comm) we put in an offer of 1,6 and the agent accepted it right away. I saw on the offer that the comm was then reduced to 3.5%
Its actually much fairer like that the seller loses so much more when you drop the price, this way the agent takes more of a knock.

 

[Compton_effect]

Just checked. My wife's agency runs on 7% + VAT as a average, but it is negociable based on the value of the property.
But she averages around 1 sale a month and I've seen some of the stuff they've had to sort out.
Funny enough - she's the one that told me not to trust estate agents.

 

[MKFrost]

The average, ask MKFrost, I think i saw it mentioned on this forum.

Why ask me, I'm not an agent....

I can however share what I did recently with the sale of my property...

The agent initially wanted 6% so I sat down and discussed this with him to find out what he planned on doing for that 6%. He gave me the normal reply in that they would advertise it, have an 'open house' session and some other drivel but no real specifics.

It was clear that he wanted 6% for the two or three odd adds and one 'open house' session (if any at all) and I was not happy with this. Basically he could not justify why he should be earning almost a quarter of a million Rand for doing essentially nothing.

I then worked out a short marketing plan i.e. the number, size and frequency of the advertisements, the media to be used i.e. local paper, web site, etc... and told him that I was willing to pay maximum 4% should they follow that plan to the letter, take it or leave it. He accepted the plan and that became our agreement.

Property was sold within a month and I think its the first honest commission that agent has earned as I made him work for it. I think most people never go into the details of the commission to be paid and forget that they are essentially employing the agent to work for them. If somebody works for me I dictate the terms, not the other way round.

 

[Ockie]

Just checked. My wife's agency runs on 7% + VAT as a average, but it is negociable based on the value of the property.
But she averages around 1 sale a month and I've seen some of the stuff they've had to sort out.
Funny enough - she's the one that told me not to trust estate agents.

For R70 000.00 they can bloody hell sort out what ever comes their way! Not to mention R105 000.00 Jeez. Sorry....I am sure your wife is a great agent and everything. This is not aimed at her ..... but frekking hell.

 

[ProfA]

not sure if mentioned before, and sorry if this applies to you or family, but estate agents are scum.

As you were.

 

[Nerfherder]

For R70 000.00 they can bloody hell sort out what ever comes their way! Not to mention R105 000.00 Jeez. Sorry....I am sure your wife is a great agent and everything. This is not aimed at her ..... but frekking hell.

A good agent will get you a good price on your house. If you are getting a good price then they deserve the comm. You are insentivising them to make a sale.

Thats why you hire a shark to sell your house... so they naai someone else in to paying too much for it. Its the same reason you hire a good lawyer.

 

[Ockie]

A good agent will get you a good price on your house. If you are getting a good price then they deserve the comm. You are insentivising them to make a sale.

Thats why you hire a shark to sell your house... so they naai someone else in to paying too much for it. Its the same reason you hire a good lawyer.

Fine...but why the hell do they work with 7% here while in the UK they work on 1.5%? Is this just a case of we getting screwed blind and we are happy to bend over for it?

I think 4% is more than fair...maybe 5% if he is a hot hairy hunk and does my open house with his shirt off!

 

[F1 Fan]

To be quite honest, I would advertise the property privately first, before appointing an agent. I would also look into agreeing on a fixed price rather than a percentage.

As far as I can see, they don't do enough work to justify them getting 50-70k or more. I understand that their income is not set in stone every month, but that is not my problem. Added to that, the value of the house has no impact on their abilility to sell.

I only say this, because I bought m house last August, a day after it was on the market. So basically the agent did absolutely nothing apart from seeing me twice. First time was to see the place, second time was for OTP.

 

[ant_man]

Fine...but why the hell do they work with 7% here while in the UK they work on 1.5%? Is this just a case of we getting screwed blind and we are happy to bend over for it?

I think 4% is more than fair...maybe 5% if he is a hot hairy hunk and does my open house with his shirt off!

Forgot to mention I am an estate agent on the side