Selling Advice

Hi, I am hoping people could give me some advice.

My mother in law has a house in Carnegie (Melbourne Suburb), which she is hoping to list with Gary Peer real estate in the next week or so.

The house is about 70 - 80 years old, 4 bedroom with a reno at the rear about 20 years ago. Its a good looking house from the outside, and not bad from the inside. The house will be repainted in the next week or so. We have investigated doing a two lotter (im a land surveyor), but have decided to sell as is. The sub would give a slightly better amount, but would probably put my mother in law into an early grave, even with me doing most of it. So we are selling instead.

The value is around 1.5m after the painting and staging.

The sales rep came to her house and chatted for an hour and half and confused her with the commission structure etc.

She has asked me to talk with him tonight, and negotiate the sales commissions and marketing requirements.

Will prob go to auction.

I would love some input from others on here.

What rate is appropriate for 1.5m, and would a sliding scale work best, or a set rate?
What marketing works best for this product? What are the must haves and the maybe haves?
Any other advice?

Thank you

 

What commission structure did the agent suggest?

 

2.2% and a sliding scale.

Any suggestions?

 

What exactly does sliding scale mean? The thing is to make sure the sliding scale actually gives the agent incentive to sell for more.

 

Has she spoken with any other agent? A second (or 3rd) opinion doesn't go astray. He may be blowing smoke her way to win the business or be so far off the mark (low) that achieving a higher sum will result in paying maximum commission.

Any bonus should only apply to sums above the stretch target.

What sort of marketing are they pushing?

 

I actually don't know much of what he is saying, I was meant to talk with him tonight but had a family thing.

I guess I am looking to find out what others have requested when they have sold. I believe (not the agents position, I dont know what they have said its worth) its worth about 1.5m on the right day. So my question is, should the sales commission be standard up to 1.5m (say 2.2%), then anything over that price should be at a higher commission, say 10%. I imagine this would incentivise the agent to really try and get a higher rate. Lets say in this example the agent then gets 1.6m, which would be great for the MIL, and the agent is walking away with an extra 10k in commission.

What has other people done in this position? Is 10% to much?

Marketing: What is a must? Just the usual websites and the brochures for the open houses? What else is required and must? What else have you found worked for you?

I dont want the agent using the marketing spend to further their own brand under the guise of marketing her property, which I think I have heard a bit of the marketing spend can sometimes be about.

 

I love the agents that want to sell you the "advertising package"
Avoid any advertising to be done in local paper or property magazine
99% of buyers will find the property off the web, print is usually just agent advertising
Professional photo's, one main web site and a board out the front
You can get the pics done yourself if you want just pay for more not less, so there is plenty to choose from

 

If you are going to sign up to a commission structure like that (I wouldn't) then make sure that you get several appraisals. It is not unheard of that an agent takes advantage of vulnerable people who are naive to the true value of their property. Surely as an agent you should do you best for your client and not need a bonus % for simply doing your job.

 

If the agent has lowballed the selling price, over achieves (for very little effort), they see then getting a substantial uplift in commission for what is essentially achieving market value.

 

I have used this structure a number of times with good results. You must know and be very comfortable with your market price though where the higher commission kicks in.
It is a very good incentive for the agent to push hard for your property for the maximum result.
If not over-achieved 10% of $0 costs you nothing but make sure (suggest other agents & own research) what the property is worth.
You could also suggest a lower % for underachieve to ensure they’re not trying to buy the listing.
Agree with others, listings on the usual Sites & brochures especially if a sub-div site. No need for newspapers or fancy RE mags.
Check with a few other agents.
Good luck!