Is The Current Commission Structure Set To Change For Real Estate Agents?
3 min read |
There is a lot of continued debate over real estate agents’ commissions and the value they offer, particularly when the seller also has to pay for the advertising costs and other expenses associated with the sale of the property. The question remains, what are customers truly after and is there a better way to structure fees when it comes to selling homes?
We are seeing a rise in real estate agent comparison sites to help customers more openly determine value. These sites offer satisfaction ratings for agents along with the number of properties they have sold within your area and the highest value of sale, amongst other information including their commission rate.
The average commission Real Estate Agents charge varies between metro and regional areas – the lowest is about 1.6% and the highest around 4%. Across the country, the average charge is between 2% and 2.5%.
Adding to the commission confusion, new agency ‘disruptors’ have tried to make a success in the real estate market by offering a flat fee structure for selling homes with no commission at all. Both Go Geko and Purple Bricks however they have been unsuccessful making a permanent presence in the Australian market-place. Purple Bricks is currently winding up its local operations in Australia and Go Geko has not been seen for a few years now.
The Solution?
So what is the solution? One Brisbane Real Estate Agency ‘Bees Nees Realty’ has announced it is going to offer a new way of selling Brisbane real estate. They believe they have discovered a fairer way for both the seller and agent to sell properties.
Rob Honeycombe, Director of Bees Nees says “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 in the crowd, demonstrating real value to home buyers, takes more effort and money than ever.”
Honeycombe goes on to say “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.”
When talking about why the need for change has come about, Honeycombe says “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 money. 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.”
Could Bees Nees Realty changing their commission structure be a more professional approach to the way Real Estate Agents are paid and will other agents follow suit? Will Bees Nees Realty leading the way in changing the commission structure for Real Estate Agents?
What do you think? Leave your comment below or email your your thoughts to victor.james@validumgroup.com.au.
If you’re looking to become qualified in the real estate industry or upskill your real estate qualifications, call Validum Institute TODAY on (07) 3193 5270 to find out more about our fresh new blended approach to learning.
