Negotiating Sales Commission

Discussion in 'The Buying & Selling Process' started by GreenTreeFrog, 26th Oct, 2019.

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  1. GreenTreeFrog

    GreenTreeFrog Well-Known Member

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    Hi everyone,

    I have previously listed a rezoned property with an agent for 1% commission.

    I am relisting the same property with a new agent but he wants 1.5% commission.

    What advice or strategy can you give me on negotiating down to the 1%?

    He has my neighbors property listed at 1.5% commission, I would like to negotiate 1%.

    Thanks for any suggestions!

    Thanks.
     
  2. The Y-man

    The Y-man Moderator Staff Member

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    How much is the sales price roughly?

    The Y-man
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    So you only want the agent to reduce their commission by 1/3?

    What do you not want them to do? Open for less time, not follow up on leads, split the commission with another agent?
     
  4. GreenTreeFrog

    GreenTreeFrog Well-Known Member

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    I'd rather not say because I don't really know, I can only go off previous offers that I would rather not disclose. It's a small acreage rezoned B2, R4 and R3.
     
  5. GreenTreeFrog

    GreenTreeFrog Well-Known Member

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    The agent has my neighbours property listed at 1.5% commission. He has interested developers who are asking about my place because it would mean they can develop over common boundaries (we share a 225m boundary) instead of having to conform to the current 9m set backs. I think I am in a strong position to negotiate a better rate. I had 1% with the previous agent. The two properties are zoned B2, R4 and R3.

    If I negotiate a better rate are you saying I should expect less service? Is that standard when negotiating commission with real estate?
     
  6. 738

    738 Well-Known Member

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    Hard to say if 1% is low or high as we don’t know the property value. Can’t help without that info.
     
  7. ChrisP73

    ChrisP73 Well-Known Member

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    If the agent already has buyers then less work required. If you're not that fussed if you sell now but just want to explore the opportunity, then tell 'em 1% take it or leave it.

    The other option is a greater % of the price above a conservative valuation which will align the agents interests with yours if you're looking to maximise the price
     
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  8. 738

    738 Well-Known Member

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    Fee isn’t necessarily based on amount of work.
     
  9. Scott No Mates

    Scott No Mates Well-Known Member

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    If you haven't presented all of the facts, the responses that you get reflect the misinformation provided. What incentive is there for the agent to achieve a higher price if they're only going to receive $100 for every $10k increase? There's a greater likelihood of getting the first punter who stumps up an offer not the best offer.

    Selling a single site to the punter in the street vs selling a combined development site to experienced developers are different things, different skillsets, different contact lists. You noted that it was a rezoned site, obviously you expect more for it but not willing to pay the agent?

    If they're selling to a developer, they have more often than not pre-qualified the potential buyers, put in the hard yards and would believe that they deserve adequate compensation for the unseen legwork they've already done.

    Do the two sites combined provide greater uplift for the developer or can they only put just as many again on your site?

    There's alot of issues that need to be considered by the agent before accepting the proposition or dropping their commission. What sort of negotiator are they if they're willing to accept your proposition when it may mean a substantial reduction in comms vs taking on more lucrative work.
     
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  10. Marg4000

    Marg4000 Well-Known Member

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    Not much different to the extra $150 they would get with the higher commission quoted.

    Their job is to get you the best price possible. Anything less and they are not doing their job, regardless of the extra .5% or not.
     
  11. ChrisP73

    ChrisP73 Well-Known Member

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    Yeah, perverse isn't it. Who wouldn't want to be on the 'sell' side of that trade.
     
  12. Scott No Mates

    Scott No Mates Well-Known Member

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    It's not about the 0.5% on the incremental, it's about getting the base to an acceptable level. A $2m sale would be $20,000 vs $30,000 not a few hundred dollars difference.
     
  13. Hosko

    Hosko Well-Known Member

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    How did the first agent go who was doing it at 1% commission? Did you achieve the result you were after?
    You said that you are resisting the same property,I hope you get the result you are after
     
  14. kaibo

    kaibo Well-Known Member

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    Are you kidding me? You're negotiating commission with an agent and you don't have a handle of approximate price, obviously the agent has told you what they think, commission comes last in discussion usually