Whats a reasonable mark up on owner selling price?

Discussion in 'The Buying & Selling Process' started by Mogul, 22nd Jul, 2017.

Join Australia's most dynamic and respected property investment community
  1. Mogul

    Mogul Active Member

    Joined:
    10th May, 2016
    Posts:
    37
    Location:
    Gold Coast
    I have been watching some properties for sale and one was for sale by owner, then after a period of not selling, I assume they have engaged in a Real Estate agent - suddenly the selling price jumped from $500k to $545k.

    Which prompts me to ask the question, just how much do Real Estate agents price above the seller price. Is this normal in this price range? That seems like a massive amount of profit to me even after taking into account the cost of the agent time, expertise.
     
  2. D.T.

    D.T. Specialist Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    8,483
    Location:
    Adelaide, SA
    Its hard to say without bring privvy to the conversation.

    Maybe 545 is what the agent is able to achieve since he's better at marketing and has access to a much wider network than the owner does.

    Or maybe the owner is stubborn and wouldnt let an agent take it over without effectively paying for himself out of it.

    Not sure of the market in that area, but willing to wager it sells for closer to 500k with agent once owner realises that's where market level actually is.
     
    Mogul likes this.
  3. MTR

    MTR Material Girl Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    16,297
    Location:
    My World
    I don't know what is normal? But what I do know is it is buyers that dictate the market price not the seller.

    However, I would consider market conditions, if it is a strong/rising market then prices can go well above asking price as there is competition, like a Dutch auction, you may have more than one offer on the table. If it is a falling market then it works the opposite way, no buyers, prices fall back
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    14,108
    Location:
    Sydney or NSW or Australia
    Vendor is a price taker - the agent sells the dream to the buyer and a different dream to the vendor (to win the commission). If the vendor believes the agent's dream, they go with that agent.
     
  5. Sackie

    Sackie Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    12,776
    Location:
    All over the place.
    That's why i never tell my own selling agent the truth of what I'm thinking. Unfortunately to a certain extent they also need to be treated as 'the enemy ' imo. I know exactly how they operate so I'm able to beat them at their own game to get the best result possible for myself.
     
    Ed Barton and Scott No Mates like this.