Getting the best from your Brisbane real estate agent and why flat fees isn’t the answer!
When the UK’s largest real estate business arrived in Australia in 2016 it was pretty obvious they’d shake things up. With a mammoth advertising budget and some fairly eye-catching TV ads, the purple giant promised home sellers they’d rescue them from their misery of paying commission. They were here to do an “Aussie John” Symonds and save you from agents! And, partly due to them, we’d argue the cost of selling a Brisbane property is now coming down.
This won’t be popular with some of our industry colleagues – but we admire them for offering something new. While technology has brought numerous innovations to home buying in this country (think of all the new search, data and marketing tools you use today), the way your property is sold has largely remained unchanged for decades. These big pommie newcomers have rolled out their flat fee model and publicly and noisily questioned the logic in paying agents commission.
So here’s the sentiment they’ve tapped into: A sale commission is often the largest professional fee anyone ever pays. In Brisbane it averages around $15,000 including gst. Usually more than you spend with lawyers, doctors or accountants. And unless the agent’s service is first rate and the sellers are pleased with their result, it’s completely understandable that sum can be called into question. It should be.
Flat fee models are popping up in other countries and here’s how it works: They charge the same dollar amount and pay it regardless of selling price or whether or not you actually sell. The UK has several flat fee agencies and on our fact-finding mission to the USA in January we saw a number challenging their Realtor status quo where a typical commission is 5-6% of the sale price.
And this is what caught our eye: the big Wall Street investment in some of these businesses has brought breathtakingly rapid innovation. New tech-enabled back-end processes and systems that genuinely make the agents more efficient. Some of these agencies have leap-frogged their competitors to provide faster and simpler ways to sell a property. New ways for agents to deliver a more affordable service without compromising quality. That’s where Bees Nees City Realty is heading.
As more efficient agents can handle more sales their cost will come down. But is a flat fee the best model? Some Australian agents have reacted to the UK giant’s invasion by angrily arguing that a good agent earns a seller more. Much more than their commission through, among many things, better negotiation. Working harder, pushing for a higher price. And we couldn’t agree more.
If a real estate agent is paid the same, regardless of whether your property sells, will you get the best from them? If the agent earns not one dollar more, how many will go a step further? To take that phone call when they’re prefer to relax with friends. To show the house one more time. To ask that buyer for a higher offer. It’s simple human nature – salespeople need to be remunerated on results. A commission has an important place in real estate because it links the agent’s result with yours. We’re in this together and we’re there to get you the best possible result.
What does this mean for you? Brisbane’s real estate agents need to innovate and find new ways to modernise our service. Thanks to advances in technology and some competitive pressure from the purple giants and others, there could finally be changes on the horizon!
We’d love to hear your comments? Do you like the purple giant’s flat fee model or prefer to pay commission only when you sell? How would you change the service agents offer home sellers in Brisbane?