Why Brisbane real estate agents’ commissions aren’t fair
Four Brisbanites go to their local doctor for a check up. The doctor does all the usual tests in a long consultation, prodding and poking to ensure their patient has a clean bill of health. As they leave the first patient, unhappy with their diagnosis, decides they shouldn’t have to pay. So the other three patients each pay more to compensate the doctor for the time spent on this patient. It’s an absurd idea. You engage a professional to provide a service, yet if you don’t like what they find out for you, you don’t pay? And their other clients pay for time that’s not actually spent looking after them?
Yet this is the reality with the sales service and commission system of Brisbane real estate agents.
It might surprise you to learn that around 25% of properties put up for sale do not sell, and most agents do not receive a fee from these clients. And no, we’re not asking for sympathy for real estate agents!! But the reality of business is this means the 75% of clients who do sell (and are satisfied with the response and price – the ‘diagnosis’ from the marketplace) are paying for the agent’s time on those unsold ones. There are occasions when a property owner changes their mind after listing for sale, and they’re entitled to. But in the majority of cases an unsold property is an over-priced one, and that owner chooses to not meet the market.
So change is happening. Our agency is one that’s going to offer a new way of selling Brisbane real estate.
We’re not questioning the importance of a success fee, with the agents being rewarded for results. That’s essential and links their effort with their clients’ outcomes. That’s the reason that big agency from the UK (the one that used to make fun of agents’ commissions on their TV ads) did a massive backflip and now charges commissions!
But it simply isn’t fair for most of an agents’ clients to pay more than they should, and others receive a service free of charge. Heard of some agents offering ‘no sale, no charge’? Their successful clients are paying well and truly over the odds as they’re also subsidising other sellers’ marketing costs!
We do a lot of work to put a property to the market. There’s more complexity to the process than ever before, the legal checks and exposure for us are increasing, and there’s more steps and time we cannot skip to list and market a property if we’re doing it properly. And the cost of promoting a property is rising rapidly. Getting your property to stand out of the crowd, demonstrating real value to home buyers, takes more effort and money than ever.
Agents resist larger marketing budgets because that means the piece of the pie left for their commissions reduces. Clients can only pay so much. But ironically the better technology and tools available today can really increase buyer interest and reduce time on the market. Larger spending on premium promotional campaigns can earn higher prices and save the agents time.
The solution is simpler, fairer, a lot more affordable, and it’s what Bees Nees Realty is now doing. A flat engagement fee paid to take a property to market and promote it like crazy in a substantial campaign, and then a success fee (much smaller than a traditional commission) paid only on sale.
We’ve been a part of the old commission system for a long time and we don’t criticise agents who stick with it now. Many will argue it’s “just the way we’ve always done things”. For a seller who’s unsure if they really want to sell it might save them. But technology has changed the way we promote and sell real estate for good. These new methods are very effective solutions, but also very expensive. We can no longer throw up a sale board and wait for buyers to peer through our office window. Taking a property to market now costs thousands, no matter how you choose to pay your agent for their time.
The modern real estate professional uses new tools that can achieve market leading results for their clients. A new approach to marketing and paying your agent provides a much fairer outcome for everyone selling their property.
We’d love to explain our new service to you. Read more or call our team on 07 3214 6888! And we’d love to hear your comments.