Local Agent Finder or Local Agent Failure

We have all seen the TV ads, LocalAgentFinder is only confirming what we all know: “with the wrong agent you could lose tens of thousands of dollars from your sale price”.

For anyone that might not know, LocalAgentFinder is an online portal that purports to connect sellers with the “right local agent”, because “The right agent makes a big difference”.

They also constantly reinforce, in verbal and nonverbal communication, that it’s about fees! Agents post a profile, and a “bid” rate of commission for a listing, along with marketing costs, including how much they are prepared to subsidise, for sellers to compare.

Consider this: In Brisbane the best agents are commanding up to, and in some cases over, 3%. Is it likely that a successful, leading agent would compete for business on a site driven by heavily discounted fees? I don’t think so ! What’s most likely is that the opposite will occur ie. Agents that are struggling for listings will be pitching to get the business by over promising and under quoting.

In my opinion, It’s a likely scenario that if an agent has invested funds into securing an appointment – be it by extensive canvassing campaigns, subsidising advertising or discounting fees, when it comes to final negotiations it’s highly unlikely that said agent will have only the seller’s best interest in mind.

The reality is they need to recuperate those expenses “at any cost”. Competition amongst agents to secure a listing in this manner can’t be conducive to the best possible advice/result for a seller.

What’s more, is it likely that a top agent would want to get into an agency agreement with a seller that chose their agent based primarily on the fee rate? The real impact is that this creates a poor foundation for any ensuing business relationship between seller and agent. From the outset, it’s certainly not a win – win!

As they say; you pay peanuts to get monkeys.

 

Yep - pretty much. Same everywhere.

 

The REA is either going to do the following;

1. Increase their fees to cover fees the agent portal charges them (IIRC it is 0.5% of sale price).
2. Not participate with the portal as it is most likely the cheapest agent as fees are paramount in the persons decision.
3. Match fees but the level of motivation is reduce as the office is going to get 0.5% less in commission than before which will impact them severely as they are likely to get 20% list and 20% sell of the 2% now 1.5% commission.

For example a 500k purchase at 2% would yield 10k in commission for the office the REA would likely get 20% (2k) for listing the property and the selling agent (not always the listing agent) would get 20% (2k) if they did both list & sell they would of had 4k commission.

At 1.5% we are talking 7.5k total commission or 1.5k for each part (list/sell) or total 3k for both.

Would you do the job to the same standard as you would of done for 25% less than what you normally get paid?

Like I always keep saying 'the end user always pays', I am thinking maybe I should trademark this haha.

 

Same applies to MBs who sell on rate and ignore or are not aware of your short, medium and long term goals.

You will be better off paying a professional what they are worth rather than ending up with a cowboy.

 

Can't agree more Colin, what a lot of those guys do is bordering on criminal in my mind

 

Sorry Colin, I just realised you were talking about Mortgage Brokers and I thought you were referring to property "marketing" groups and their "wealth building" funnels.. ... They're the criminals

 

My partner and I were in disagreement on which agent to use. He had his favourite. So what we did in selling our old PPOR was to look all sales in my area for the previous few months, (in that same market condition). I noted the properties. Ignoring who the agent was, we independently gave each sale a rating out of 10 for the sale price achieved. (All relative to the house). Got my partner to do the same. Then looked at who the agent was who sold these properties. We ignored anybody who sold just 1 property. Of the remainder we averaged out the scores given across all their sales. We came up with the agent with the strongest average and we were happy to go with that way. So we engaged her. And I am happy with the price she got. Her fees were very reasonable too, (much better than my partners preferred agent) and everything was done very professionally, excellent photos etc. I would recommend her...

Btw, my partners preferred agent had a lower score when we did the assessment, and had signficantly higher commissions (another 30%), and she limits photos on the internet to 6.... I just think it doesn't do homes in this area any justice.

Anyway... all worked out really well for us!

With the website you mentioned... yep. I don't think quality agents would generally pitch on there.
My partners favourite agent ranks highest on the "rate my agent" site, (obviously in pitching to us she said to look it up) but I believe its something agents pay for and you need your clients to rate you. The agent we went with has not asked me to rate her on any site like that... so the scores and ratings on their should be treated with a huge grain of salt.

 

@Gockie - there's nothing worse than an educated vendor If the vendor has thoroughly researched the market, as you did, your expectations are set within reason and backed by sales/facts. When the agent presents you already have your comparables and they should be closely aligned with the agent's submission. If they aren't - you're talking to the wrong agent.

If the agent performs, sales price should hit the expectations unless market conditions/sentiment changes.

 

I love educated vendors as it allows you to have frank and honest conversations from the outset and I feel is more conducive to an on going relationship and building trust. I also find educated vendors are much more efficient at ridding the charf.

 

Yep, same in PM. I think the educated ones trust you to get on and do your job and want more of a hands off experience.

 

Wise to take them with a grain of salt ! I've not heard of agents paying vendors for testimonials or ratings but the reality is that the seller/buyer can't rate them without the agent inviting them to. Obviously you don't invite anybody you dont expect a great review from..

 

While I agree with you on some level, there are some exceptions.

Not having been in the game for years and years it's hard to get your name in the market. We aren't on that site but negotiations are an option for us to secure a listing.

I don't think this means we are not going to be a great agent for the customer. Our focus is providing the best customer service which comes naturally because we love our job and love dealing with people everyday.

 

I find the agents sites helpful as a purchaser and vendor. Everyone sells on some sort of fear or risk factor.. especially children's food and toys... you do not have to use them, they act to me as a portal to get a reasonable overview of an area. Then it is up to you do as much of a deep dive as you would like. www.localagentfinder.com.au appears similar to most of the others.. I l Love what one vendor did above, but some of us do not have time and do not know the area - so we invest or sell and move on. We need somewhere to start... if there is a better suggestion to find the agents in your area let me know..

 

When CommSec was introduced I asked a stock broker I know if they were threatened by it. The response was it gets rid of all the 'cheap' investors who take up a lot of time and aren't profitable for them. They focus on the larger investors that want quality advice and are willing to pay for it.

For my business it's the same. I'm not interested in paying to be referred by a comparison site or invest in search engines. I'm already fairly busy and I've got no interest in competing in a race to the bottom and parting with a significant amount of money to do it.

The best agents aren't going to use a website like this. The best people already get plenty of business from their relationships. Comparison websites generate money because the services they compare pay them for the referral. They tend to only compare the bottom end of the market.

 

Spot on Peter.

And the ones who do want to race the cost down are the types who need to because they are usually hopeless at their craft or think they can dominate the market but then get consumed with the compliance and basic admin. I can imagine any loan application probably has a few hours at a minimum for that stuff even when its simple. Add complexity (which nobody ever tells you about) and you can t deliver for the budget price. So their service sucks. They misunderstand their own market and product. All they do is attract people who expect the world but who want to pay little for it. They waste your time and effort.

Its like low cost airlines. Sure fares came down. Then the great unwashed who used to take the bus decided to fly. Now you can fly Syd - Melb for cheaper than the parking. No frills nothing like it used to be. Or you can pay for abetter fare, better seat, class and comfort. You cant pay discount economy on Emirates and ask to use the shower and fresh PJs.

I have to say I love dealing with PC members. They are fairly well informed and want to be better informed and ask very intelligent and informed questions.

 

@clayton68 The problem is you are not getting an overview of the agents, typically, you're getting an overview that excludes the attraction agents, and they are the ones you want to deal with, not the desperados.

 

Exactly !

 

I think most are missing the consumer point... I have no issue that there are better agents out there than on www.local agent finder.com.au - the issue is we can't find them and like anything, time is pressing and of the essence and we need a place to start.

So can you tell me a better place to start... ? with more agents or just another comparable website... So in looking in Carlton today what process should I as a consumer follow to find the best agent that is quick... fast. These sites seem the best and fastest option...

 

You ask for a referral. What suburb is the property located in? Someone will have dealt with an agent in the local area that was great.