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Real estate agents are supposed to add value to a sale, but how much extra should you be getting for your sellers?
A well-known buyer’s agent recently said he buys up to 100 properties a year, but he never buys them at auction because if a “good agent has marketed it well, a $1 million property will go for $1.05 million or $1.10 million.”
Television host and CEO at Your Empire, Chris Gray made the point in conversation with Tom Panos on his Sky News show, in response to Purplebricks shaking up the existing real estate agent model.
But Mr Gray and Mr Panos said it would be a mistake for people to sell their properties without an agent.
“So if it cost you 20 grand for an agency to get you 50 or a 100 [thousand] more, then you know it is a guarantee,” Mr Gray said.
Mr Panos agreed that a good real estate negotiator can add five to 10 per cent to the value of a transaction.
“Because what you are paying an agent for is the resources that they bring to the table, which is the marketing that attracts more buyers,” he said.
Mr Panos said private vendors do not have the marketing resources available to them that an agent has.
“For instance, you can’t put your property on the market with realestate.com.au if you are a private individual seller and that is going to limit a lot of your buyer inquiry,” he said.
“I’m sure you can put it on a lot of other portals, but that is the best portal. I think most people have that as their preferred website.”
Mr Panos added that private vendors will not be able to separate their emotions from the business deal when selling their own homes, regardless of how savvy they are.
“Imagine if I came over to your property and I’m negotiating with you... you’d take it personally when I say to you, ‘You’ve got a dreadful kitchen, you’ve got a dreadful bathroom, and here is my final figure.’”
Purplebricks is the UK’s fourth largest real estate agency and has a 60 per cent share of the online market.
In August, it launched its flat-fee commission model in four Australian locations – Melbourne, Brisbane, the Gold Coast and the Sunshine Coast, with Sydney, Perth and Adelaide to follow.
It has recruited 50 LPEs to assist vendors selling their properties, and it expects to recruit as many as 300 in two years.
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