Increase in selling costs vendor's advocate

I had found a likely selling agent and was persuaded to use a vendor's advocate. No extra cost to me. The VA did a few things that looked good, but when I saw the figures it was a bit upsetting. The REAs that I had canvased now had higher fees and commissions. The one that I was keen on had bumped the commission 50 basis points, had to use their contractors, more costly marketing, etc.

It seems that to cover the VA commission the REA increases everything. The differences are substantial, several thousand dollars, and I'm not sure that I want to go down this track.

Has anyone had experience with this or is able to shed light on increases as I describe above? Also, is there a band of REA selling rates for Melbourne?

 

Do you feel it was misleading, or deceptive ?
If so you may have grounds to argue breach of State consumer laws

 

I'm unsure about misleading. It may be so. I know about Australian Consumer Law. I can see it from the REA's point of view, 30% of their commission lost, so they bump up the costs. I'm happy to pay a fair price for a professional VA to do his or her job, but this is now seeming marginal.

 

Do you have a contract with the agent in written form? If so this would have the fees you agreed upon. If not then you are still able to negotiate fees before you enter into the contract.

btw, what is a vendor's agent? and what do they supposedly do?

 

I have a contract with the vendor's agent, but not with the REA. A vendor's agent assists with the selling process, finding and reviewing REAs, advising about presentation, etc.

 

in that case you can negotiate terms with the agents - they should be doing that for you too.

 

They bump into you; slip their hand in your pocket and swipe your Amex.

 

True, but all the agents have increased all their fees to cover the loss of commission. One agent has increased marketing fees from $5000 to $6500. All costs for every agent have gone up.

Yesterday I asked "Also, is there a band of REA selling rates for Melbourne?" Advice on that would be appreciated

 

You can just negotiate this fee or find another agent.

 

Have you asked the agent why their costs have increased? What are you getting which is different from their original offering?

 

Trying to understand. The likely selling agent recommended you a vendors advocate?

 

Depending on area & price point - approx 2% incl GST and approx $2k for standard marketing - internet, picture adv board, brochures, professional photos. Not including print which is $$$.
Staging costs are not included as usually your own (smart) decision

 

Sorry about the delay. I was meant to be getting notification of posts. Did not happen.

Competing priorities, have been unable to ask agents. There is nothing different except now my preferred agent says that I must use their contractors for a number of aspects. I have some of these done, don't need to do them again.

I recommended the selling agent to the VA.

Marketing has shot up from $5000 to nearly $6500. One problem is that I do not know how much online advertising costs, and if the cost is padded. For example, website sell.com may charge $800 and the selling agent says that the cost to me is $1000. These start to add up to quite a bit.

My bottom line is that I had a commission of 1.5% and $5000 in marketing, and now it's 2% and $6500 with the VA.

 

Put yourself in agents shoes. They have gone from 1.5% commission to .75% commission for the same amount of work. I can understand completely why price has gone up.

Is the advertising exactly the same between the 5k to 6.5k ?

 

This time I did get an email alert about a new post.

That is my thinking also. For all the advantages of a VA, I see the costs for the vendor going up significantly. I do not know about the advertising details of the $6500 package. Onece I know how much the main websites cost I can compare them. Spending $6500 seems a lot.

 

So you've added a vendors agent and they want to be paid. Hence the overall fees go up? Whoever said "no more cost to you" should be responsible as it appears to be misleading.

 

The reality of the situation is that vendors advocate claim that there is no extra cost to client. However the fee usually does increase to factor in the vendor advocates fee.

If the vendors advocate can really add value to the process they should be able to claim their own fee and not leach of the selling agent.

 

Does the VA add significant value to the process, ultimately helping you choose a better agent resulting in a better outcome?

If the service adds value, then it will always come at a cost.

 

You've mentioned 2 costs which will increase: commission up by 0.5% (or by 33% in my book) and advertising by $1,500. Has the agent adjusted the expected selling price achievable?

Eg previous: sell $500k, mktg. $5,000, comms $7,500 - nett $487,500

VA: Sell $500k, mktg $6,500 comms $10k - nett $483,500

Or is the VA driving a better result to justify their existence? ie $506k, $6,500 $10,120 with nett $489,380

 

To add to the above, will the selling agent accept a stepped commission? If they don't achieve within their previously nominated range, they only get the commission they had nominated. If, they achieve a revised amount based on the va's efforts, they can get the 2% on the lot.