Industry disruptors - real estate online websites

There was an agency possibly a franchise a few years ago in Melbournes South that had flat fee commissions. I think most it was 5k or 6k. I thought it was a good idea but it fizzled out pretty quickly.

Done right it might be OK. Done bad. It will fizzle

 

Thank you. This is helpful feedback

 

We have one in Hobart. 7k flat rate

 

How successfully has that worked ?
And based on what do you tell the agent what you will pay them ?

 

Worked every single time.

I simply tell them this is my offer take it or leave it. Also many are keen on being the exclusive appointed. Again if so, my view is they need to "pay" me for this (hence again a basis for seeking a lower commission).

I also negotiate rental management commission (and if they refuse, which sometimes happens) I send a polite note telling them where I went and who agreed to my offer, and that I might still consider them for a future property.

 

Call me old fashioned, but this is exactly why I would never ever go near something like purple bricks (or what ever they call themselves). In my experience a good agent is invaluable when it comes to selling a property.

 

Just sold an IP using online company. $99 fee to list on Domain and RE.com

Sold for 10% more than another apartment in complex sold for 4 weeks earlier (with RE agent) and I don't have a commission to pay

 

Which company did you use?

 

Zerocommission.com.au

They had a promo for $99 and I signed up. Easy to use platform.

 

Thanks. I've seen services like this before. But im curious how they are allowed on the re.com.au platform as I thought they only allow agents (not private sellers).

 

The company acts as the agent for listing purposes

 

Yes. Thought this must be the case.

 

I definitely feel the fee charged by REA's for the work they do is ridiculous. I have been involved in selling enough houses now to know that most of what as sold as benefits of using a REA are massively overstated!
I am sure there are some agents who are excellent and could help fetch their fee and then some but most are not worth close to what they charge.

Let's use say a 500k home at 2% for a fee of 10k.
How many hours work go into that 10k?

Initial Meeting - 2 hours
Listing and marketing - 4 hours
Opens (8 being generous of 2 per week in a 4 week campaign) - 8 hours
Follow-ups and taking calls/answering emails - 10 hours (again being very generous)
Auction - 1 hour
Work to settlement and handover - 3 hours

TOTAL HOURS = I'll happily round to 30 hours work.
$10,000/30 = $333 hourly rate.
Think about the professionals with wall to walls of accreditation and 30 years experience, and think about how many of them even charge close to this? To become a REA you need a 5 day course.

And let me tell you what they don't do that they sell as a benefit:
The marketing campaign = Photos and floor plan sketch are always done well but this is by a 3rd party and not the REA. Every house i have sold or been involved in selling i have had to rewrite the ad because it was so poor. Literally a carbon copy of every other ad on the site.

Database of contacts and potential buyers = This one makes me laugh the most! They might have potential buyers but those same buyers would in 99.99% of the time find the property themselves as they are actively looking to purchase a property in the area the agent is selling in!!!
They list the ad and wait for the calls and people to rock up.

Negotiation Skills = Wonder why most of them have trouble negotiating the fee when i tell them to drop it and they oblige? Wonder what happens during the negotiations you are unable to be there for?

With that all said the biggest benefit selling with an agent does have is that buyers will no doubt feel more comfortable speaking with a non-related party to the transaction.

 

Since the agency I own is rentals only, we have a package with realestate.com.au that is geared that way. Eg rental listings are well priced but sales listings are really expensive. So its cheaper to use an online platform for my own personal IPs I'm selling.

Things with buymyplace started out really well. I registered on the site one afternoon. Next morning I got 3 phone calls from 3 different departments there to organise stuff - like signboard, listing and welcome/intro. Thought this is definitely moving along.

Platform is quite counter intuitive. I come from an IT background so can usually suss my way around. Eventually got the listing photos / text all setup. Check if its gone live. Wait a few hrs, check again. Nope. Contact support who say there was some glitch but they've pushed it through.

So listing is up and not getting any enquiries for the first week so did a test one from my other email acct and got some colleagues to as well. Nope. Contact support again. There's some glitch but they've fixed it now.

So went up there (property is about an hr from where I live) to do a home open. This was 2-3 weeks in due to sorting out the above stuff and seeing if anyone was showing any interest. Get there and notice the sign hasn't been delivered. Emailed them but no response yet, must be closed for holidays?

Other people have had good success with them. Just annoying that there's speed humps every step of the way. I have a few I'm selling, will not be using them for the others.

 

I wouldn't have folded for you. Same as I won't fold on tenants demands , need to keep consistent across the board.

 

You're deluded if you think its linear to hours. You're also basing the sums on practices of poor agents.

The good ones have spent years working on their databases. If you think its about chucking it online and see who calls, I dare you to give it a crack yourself. Go work every weekend showing houses.

Same as the prospective tenants database we use. Developed over time. Texts and emails go out to people when properties get listed or if price changes. As a result, we lease places better than almost anyone. Suppose you want to attach an hourly rate on me pressing the send button too?

 

Hey @D.T, my post is in no way on attack on you and your industry! I highly respect property managers and think you guys are underpaid, quite severely in comparison to a REA who sells a house.

I am not sure you can compare a rental database to a sales one though. Your industry in the right areas is extremely hot and as such sending emails and texts to the database makes perfect sense in lieu of listing it for rent.
Selling is totally different, you would be crazy to not list a house for sale on the web and run a 4 week campaign in which case the use of a database is extremely limited.

And FYI I work with a database with over 1 million contacts so I know their use better than most

 

And again no argument but explain to me how the time invested into selling a house is not linear based upon being a single transaction.

Are you suggesting past experience is a justification for such a hefty hourly rate in terms of the works put into the transaction? Again no argument but just trying to understand exactly what you mean

 

I think what DT is saying is that on top of the value you are paying him, there is also a $ figure on his list of contacts/leads within his database that have been built up over the years.