Agent Commission for Selling House?

Hi all,

I am selling my investment property in Victoria and i received an appraisal letter from the real estate age stating that their service fee is 2%. No where on the form does it say that figure is ex GST. Today i received the paperwork from the agent with a 2.2% commission fee listed. When i queried the agent, they said its 2% + GST = 2.2%. I'd like to know if this is normal, and whether 2.2% is considered high from a commission stand point when selling a home in Victoria?

Thanks.

 

It depends on what the house is worth

 

The house is worth between $340K - $360K

 

Even 2.5% can be justified on such a small deal imho. What are others quoting? Are they any better?

 

They should have given the inc GST price.....avoids this type of annoyance.

Lot of cheaper regionals work on 3% 2.2 is not bad IMO.....

 

If the agent is any good then they are worth 2.2%. My last sale in Melbourne I picked what I thought would be a good agent and he charged 1.5%. I was wrong and he was terrible! I would have gladly paid more for a better agent.

 

he should have included gst (legally i would say but too lazy to google)...may be cheap even at 2.2% but you shouldn't encourage misleading tactics

 

Look at how good the agent is rather than the percentage however its slightly sneaky and they should be quoting including GST.

 

Yeah, a clever way to start off on the wrong foot, no matter what your charging or how good you are IMO

Watch likely downhill from here.

 

Yes, a common figure. My vendor clients tend to negotiate 1.98% inc GST up to reserve and then 2.2% inc GST for the amount above reserve - a great incentive for the agent.

 

When I sold a property I set the reserve $50k higher than what I would have been happy with.

On auction day we were about $30k off from the reserve with the last bid. Principal pulled me aside trying to convince me to take it blah blah. On the spot I told him I'm not taking it unless he'd make a compromise right now to halve his commission. He was happy with that (I guess to avoid more work selling it and not let the past 4 weeks go to waste), quickly drew up an agreement on piece of paper and I ended up getting more than I wanted plus around $9k saving in selling fees

Was mostly luck and not anticipated but the lesson is to make sure you're dealing with a decision maker and that everything is negotiable!

As a kind gesture I gave him a glowing review after

 

LOL That's fantastic !! lets hope sometime soon someone shafts you on your agreed fee after you have achieved a great result for them !

 

Sounds like he was a terrible negotiator. There is no way I would be giving my money away. Power to you @Simon L

 

Anybody else find this confusing :|

Reserve was $50k higher than happy price

Bid went to $30k below reserve, which should have put it $20,000 ABOVE your 'happy price'.

So you than strong armed the agent into cutting his commission.

End result - you got $20k above happy price and paid half the agreed sales commission to the agent.

Hats off to you, but doesn't sit well with me when by the sounds the agent did everything right.

 

Wow, how overly generous. Yes, it is a 10% increase in the commission but it equates to $22/$10,000 extra that they achieve for the vendor. Sure, this may be one knockout bid but it may also be 1/2 hour of post auction negotiations.

This is not an incentive but more an insult imho. An incentive would be doubling the commission on the amount over the reserve.

You have hit your happy place so giving away 2% additional is not a big stretch.

 

I think most would agree that real estate sales is a dog eat dog type industry. Agents routinely stitch up their 'clients'. If this agent wasn't able to hold their own with a mere vendor, maybe they should look to other fields of employment. Sounds like both parties walked away in agreement, no guns to anyone's head, so a good and fair outcome of seems. Crunching the agent vs crunching the vendor?

 

From my understanding you with GST is that if you are quoting or advertising to a person it is always including GST.

If you are quoting or advertising to only a business you must clearly market it as excluding gst/ex GST otherwise it will be treated as inc GST.

If the marketing goes to both person and business the price needs to be inc GST.

You can talk to the ACCC if you really want to and you would likely have a strong case with just 2% written on the agreement but it might not be worth the effort.

More reading can be found here

ACCC warns service sector to include GST in advertised prices