$3m+ selling costs?

Hi all,

We’re looking at selling our family house with expections of $3.5m+ To relocate interstate.

Melbourne based, Inner South Eastern Suburbs. 4 bedroom on 700m2 of land.

Keen to understand what would constitute a fair Agents Cost (ex-Marketing) for either Private Sale and/or Auction at this price point.

Most of what I can find online is for properties less than $1m, so the % of sale price should be lower given economies of scale- just keen to get a feel on how hard to negotiate given lack of data points.

Appreciate your help in advance.

 

Why not just call a few agents and ask what they will accept?

 

Dont assume that the % fee is less because of a higher value. Often these properties require costly marketing in the property supplement v's cheaper web listings.

I would speak to the better regarded local agents and get a feel for expected cost. You could discuss with Purple Bricks if you want low cost budget but ask yourself what you get for that budget cost. And if its a waste of $$ paid upfront.

 

1.1%

I can tell If the agent says 2+% because they do a better job its usually rubbish.

I feel $33,000 is more than enough to sell a house.


Most although have databases will get their final sale through RE or Domani visitor that came.

Yes the final negotiation is very important and good agent will get the extra money.
How do you tell.

 

Speak to the agents who ask %+, then speak to their references. Ask them what they paid.

 

I walk into Woolworths and only want to pay $3 for a BBQ chook. Damn they wont sell it to me.
The airline wont allow me to fly business class because I only want to pay $1k to London.

I believe that the REA sets their price, not their client. They may negotiate it or they may not. Their 2% may incorporate the risk of investing in marketing with 0% chance of a sale. At 1.1% they wont wear that. Especially in a market where it may take several months. Buyers of $3m+ properties make up what % of buyers ? And at that price homes are not project style replicas of the neighbours.

A good real estate agent may decide not to play your game. Their first negotiation is the client. The most important however is a potential buyer.

 

Bit like buyers believeing they dictate a property’s sale price to the sellers.

But that is another story/thread .

If I was selling a $3M property, I would rather pay the top REA commission of 2.5% than pay an inferior REA commission of 2.0% and the best offer they can get us $2.9M

 

Unfortunately you've got no real comparison. You can't sell the same property twice with different agents nor can you expect wildly different results if you appointed two agents to sell two adjoining near-identical properties. There are only so many people in the market at any point in time and personal preferences/analysis will dictate what they will pay. Once they've parted with their money, they won't be in the market for the next door property (unless you got lucky).

 

I understand that.

But it does amaze me that (some) people focus on the cost and not what ends up in their bank account (as per my post).

 

1. Find the best agent
2. Find the best agent
3. Find the best agent
4. Just in case not sure that it's the most important to have best agent
5. Get the best price you can from them

 

On a realistic reserve price on a 4 week auction campaign a lot of good agents will do it @ 1% commission especially if they know you are going to move interstate soon (not testing the market). Partnered with a great marketing campaign (staging etc.). I am a bit cautious with local english print as they will most likely want you to put it in the weekly review (unsure if this is cost effective).

If asian buyer area may need to find an agent who actually has links (don't be cheated just because they have an assistant who speaks chinese) and knows what they are doing as they may market in overseas print (China), online and Asian local print.

No agent in their right mind will refuse a guaranteed 35K commission and 15K in marketing would be alright so budget 50K all up

BTW what suburb is it actually?

 

Purple bricks. A model that attracts bottom feeders.

- Agents earn little +
- Agent isnt motivated since seller paid upfront
- Agent will charge extra's
- PB attracts listings from sellers NOT sales of property
- Buyer interacts online - Not all buyers will
- Vendor is the one who negotiates unless they engage (extra cost) agent to assist
- Agents have poor / low profile. Common compliant is they cant make $$ from PB so it attracts agents who havent been successful in the traditional model. Why will they suddenly become a sales star ?

Its whole selling proposition is the vendor pays less than the market. Instead of focusing on the 2% fee its better to focus on the other 98% and seek the best campaign that will see multiple offers and demand to buy.

The downside of Purplebricks: $12,000 fee, house still for sale

 

This $12,000 fee article reminded me of sale involving my in-laws.

A couple of years ago, they were selling their Brisbane PPOR. They signed up a REA for a fixed commission fee of $12,000 (we found out after they signed the Form 6 ).

We knew they were thinking of selling but they engaged the REA while we were on holidays in Sydney and Melbourne). They thought the fixed commission was a great deal.

Events unfolded as follows:

1. The weather for the first OFI (a Saturday) was horrible (windy, raining, ...)
2. The wife wanted to go to support her parents; due to the weather, I thought it would be a waste of time. Wife went on her own.
3. 32 groups attended the OFI (including the wife).
4. In-laws received first offer in less than 2 hours.
5. I told in-laws to instruct REA to contact all 32 groups in attempt to get to a multiple offer situation.
6. Wife was never contacted; I know because she gave out my mobile.
7. I doubt whether the REA contacted any of the other groups. Why would they do extra work for no extra pay!!
8. Negotiations occurred over the Sunday and my in-laws “forced” the REA to get another $20,000 from the buyers.
9. Contract was signed the following day (the Monday).

I believe my in-laws left an easy $25,000+ on the table.

This would mean that they were $18,000+ out-of-pocket by going the “low cost” option .

 

Find an agent that will work with you.
Be realistic about the price.
Nothing more frustrating for all parties when a property is priced incorrectly.

My suggestion is to work off a tiered scale - reward the agent for getting more money for you and less money if they don’t. They know already the minimum they can sell it for.

 

Look at recent sales of similar properties and at least call the agents with the best results for an initial chat

 

Love this article:

Property Nerd | News | 2019-01-29

Especially this quote:

"If I want to go to a surgeon, I’m not going to go to the one that offers a flat fee to come along and get the op done. I’m going to go to the best possible surgeon that can do the job that will give me the most benefit at the other end."​

 

I started a thread on that rort stamp duty

How much would the buyer pay? Melb has one if highest rates??????? Ouch

 

Terrible agent! My efforts on agent selection for my last 2 sales made me happy. She was selected based on the results I saw from her last few months of sales compared to the same for all agents selling in my area. And she left me with a good feeling of she really worked to get the last dollars of the buyers. No complaints, great to work with. Similarly, my sister and her husband decided to sell with the top agent in Castle Hill Sydney. Brother in law saw he was the one who was always making sales in the area and he was the agent everybody uses.
Agent gave some simple ideas on presenting the property for sale, they received 23 offers at the COB of the Monday and they ended up achieving the second highest townhouse sale for the suburb till the date.

This just supports the idea for going with the best agent....

 

Totally agree.

But that is what happens when you choose based on price, the lowest price!!!

In other words, when you are only paying peanuts, all you are going to get is monkeys.

The really sad thing from my perspective is that I know a number of really good REAs that operate in that area. One of them holds the record price for that suburb.

I told my in-laws that I would introduce them to these guys (when they were ready) and they could choose the one they felt most comfortable with.

Instead they went out and hired a cowboy. Geez!!!

 

An agent getting 2% means 18k is $750 dollars.

This is not enough to drive most agents.

A good agent should get a good result $750 out of $20,000 commision is not going to be the reason agent tries to get you an extra $10/20k.

It will good work ethic.