In a rapidly changing marketing space, there’s much debate around different service models for the real estate market.
While the traditional model, where a seller pays a commission to an agent that is relative to the price of their home, continues to thrive – a new player has arrived.
The so-called ‘disruption’ is based on a hybrid model which is predominantly online in its makings, yet peppered with varying degrees of personal service at a fixed or lower fee. But which model is better?
Head of Strategy for the Pam Golding Property Group, Anthony Stroebel, is of the opinion that the two should co-exist. Here’s why.
The general rule of thumb
Lower priced properties are less prone to complexities, requiring less consultation and negotiation.
However, when an asset is positioned higher up on the price spectrum–properties over R2-million, for instance, and certainly over R5-million–the higher the risk.
Fundamental to this is that high-priced transactions are naturally characterised by certain intricacies that potentially threaten the seller’s return on investment.
Achieving the best market-related price in these instances is heavily reliant on the personal service, wisdom and professionalism of the experienced agent, as opposed to the hybrid online model, says Stroebel.
Different homes, different needs
The idea that selling and buying a property is a linear transaction is a myth.
It can be a complicated endeavor requiring varying degrees of professionalism, consultation and insight depending on the complexity of the transaction.
Properties that are governed by trusts or companies, or are subject to capital gains tax, are some examples of deals where the transfer of the asset requires particular guidance.
Market cycles and emotional transactions
Varying market cycles and economies can influence a transaction, contributing to the complexity of the transaction.
Tougher, less buoyant markets generally require the knowledge of estate agents who are experienced mediators and negotiators.
There are clear benefits to involving a skilled expert, committed to a win-win outcome, who is able to occupy the gap between two parties, in what can be an emotionally charged sale or purchase.
The seller’s appetite for risk
So while it seems that the two extremes can certainly co-exist, the old adage rings true–you get what you pay for. Price brackets aside, the risk factor is always an unknown in a property deal, so in making the choice of how to sell a home, sellers should assess their appetite for risk, concludes Stroebel.
This article was published in partnership with Pam Golding Properties.