What Is The Right Amount To Pay For A Sale

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When it comes time to sell, many people will select the agent on the price they quote and the fee they charge.

How much to you think our property is worth and how much do you charge? And the good news is, if you want an agent that will quote you a high selling price and low commission rate, you will find one.

As a property seller, if you felt that all agents would offer the same level of service and all buyers would be prepared to pay the same amount for your property, you would rightly choose the cheapest agent. But the reality is, not all agents will offer the same level of service and not all buyers will offer the same price for your home. In a snapshot, the cheapest agent is the agent who leaves the most money in your pocket after their fees and expenses have been deducted from the sale price. An agent who charges 1% or $10,000 on a million dollar property sale is cheaper than the agent who charges 3% or $30,000 on the same sale. The 3% agent is only cheaper if they achieve a price of more than $1,020,000. In theory, this is very simple – select the agent who leaves the most money in your pocket. In reality, the property seller needs to make value decisions about the agents before the property is listed, before the agent has begun marketing the home and before the agent has begun negotiating. The seller is in the unenviable position of having to put a value on a service in advance of the service being delivered. Whether you like it or not, when you employ an agent to sell your home, they are negotiating your financial future. The right agent is an asset and the wrong agent is a liability.

Putting a value on the agent

The best way to weigh up agents fees is to put a value on what they do. Draw up a checklist of what constitutes value in a real estate agent. It is common to think an agent comes along & lists your home, makes a few phone calls, finds a buyer and gets paid a commission. If real estate were that easy, it would not have such a high attrition rate. Real estate agents have two roles, find interested buyers and negotiate the highest price/best terms from each buyer. If the agent can achieve this without putting stress on the seller, even better, ie. even more valuable. 80% of all buyers now conduct their property search on the internet. Another 10% will be passive buyers that are on the agent’s database or call agents when they see a signboard on a house they like. Finding buyers is so simple there is now almost no value to it. Any value subscribed to finding buyers is not in the strategy, but in the time invested by the agent.


If consumers make a mistake when selecting an agent and deciding upon fees, it is that they underestimate the importance of negotiation in the process. Most agents spend excessive amounts of money looking for buyers and then use flawed negotiation strategies such as public auction to close the sale process. It is during negotiations that agents become an asset or a liability to your campaign. Whilst you may have felt good when you found the cheapest agent at the time of listing, that good feeling won’t last if your soft cuddly agent is negotiating your financial future with a hard-nosed buyer. Many buyers make an opening offer to see how the agent reacts. Many are pleasantly surprised at the response or the information that falls out of the agent’s mouth. In these instances, the seller has a massive liability on their side. The agent.

Ironically the best way to test an agents negotiating ability is to ask them to cut their commission rate. The agent’s response to being asked to drop their fee will give you a sense of how the agent handles price objections. Do they just roll over and say, “OK, sure that seems fair”? or do they hold firm with strength, pride and belief that their track record of quality service and results demands they are worthy of a fair fee. When you ask an agent to reduce their commission rate, you are witnessing the agent negotiate their own money. In watching the agent negotiate with their own money, ask yourself, do you want them negotiating with your money? If the answer is no, don’t hire that agent at any commission rate.

People are surprised to learn that you can decide to become a real estate agent on a Sunday and be legally qualified to sell houses in just over a week. The pathetically low entry level to the industry means that it is littered with people that should not be there. It is the home sellers job to work out who they are and avoid listing with them.

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