Real Estate Agent Commission is the fee or payment made to an agent for selling…
One of the most important decisions that a homeowner can make is choosing the right real estate agent. Whether you’ve decided to sell or rent your home, you’ll need to find a professional who can represent your needs and provide solid advice. Making the right choice allows you to avoid potential problems that stem from choosing the wrong real estate agent, such as selling your home for less than it’s worth or getting locked into a time-wasting contract.
(LocalAgentFinder can help you find the right agent for the right job. Click here to use our agent comparison service. Compare information on fees, marketing strategy, commission, experience and more.)
Since 2007, LocalAgentFinder has connected thousands of property owners with local real estate agents, and draws on our experience to provide you with these 5 tips to ensure you make the right choice!
1. Compare agents in your local area using LocalAgentFinder
If you’re like most people, your home will be the largest and most important purchase that you will make in your lifetime. It’s vital to find a real estate agent who you can trust in order to facilitate the rental or sale of your property.
A good first stop to make when you’re searching for the right real estate agent is LocalAgentFinder, which has thousands of agents registered to the service Australia-wide. The online dashboard allows you to compare agents in an impartial manner, without having any vested interests in the agency that you eventually choose. When you register your details, you will receive no-obligation proposals from some of Australia’s most qualified agents. You can then use this information to compare their qualifications and make the right decision. Be sure to compare factors such as references, experience, education, license, and fees. You can get started here.
It’s important to remember that selling the highest volume of properties doesn’t necessarily make an agent the right fit for your needs. You’ll want to look at all of the information presented to make a personal decision. Be sure to examine factors such as the real estate agency’s market share and fee arrangements. Going over our handy checklist is a great way to determine which factors are most important for you.
2. Interview the Candidates
Once you have compared qualifications and initial proposals, you can narrow down your search for the right real estate agent to a handful of top matches. Invite these potential candidates to your property for an inspection. During this initial meeting, the agent can give you an appraisal of your home’s value and you will have the opportunity to ask them further questions. You can take a look at our article about interview questions in order to gain inspiration.
The appraisal should include an estimated sale price for your home, based on similar homes in your neighbourhood. Along with this, the agent should be able to show you a comparative market analysis, or CMA. This report is the breakdown of how an estimated sale price was reached, and should include the following information.
- At least three recent sales of homes in the same region which have qualities comparable to your own property.
- A full listing of the average house prices in your neighbourhood.
- A full listing of other similar homes to your own property which is currently for sale in the same area.
- A list of all properties that the agent has sold recently, including the final sale prices of each property.
- This CMA will give you a deeper understanding of the real estate agent’s knowledge of your area and competition. You’ll also gain insight into their level of experience and recent sales history with this information in hand.
3. Compare Commission Rates
One figure that you’ll need to pay attention to when comparing offers from different real estate agents is the commission rate that each offers. If an offer sounds too good to be true, it most likely is.
Although real estate agents may offer very low selling fees as a way to drum up new business and attract clients, this may backfire if they don’t stand to make very much money for each sale. In this case, you may get what you pay for and take a cut in the amount of money your home eventually sells for. Although the commission is one factor to consider, it’s not as important as getting a fair price for your home. This is one circumstance in which quality may be more important than price, although you will still probably want to compare commission rates when looking at different offers from similarly qualified estate agents. If one offers a lower rate, this could tip the scales in their favour. Estate agents offer a host of benefits, including bringing in a higher sale price for your property. This service is well worth paying for.
4. Compare Appraisals
Another tactic that some real estate agents may use to entice potential clients is to give a very high appraisal of the property. Although it may be tempting to choose the agent who offers the highest value, be sure that this figure is realistic. If the price is set too high, it will be difficult to find a buyer and the house may sit on the market until the price is eventually lowered. This can be a waste of time, which is why it’s best to keep realistic expectations regarding initial market appraisals.
When you receive an appraisal from a potential real estate agent, make it a general principle to request information regarding recent property sales in your same neighbourhood to back this estimate up. If sales of similar properties went for lower values than the agent’s estimate, don’t hesitate to ask why there is a difference.
5. Understand Differences in Agreements
Finally, once you have narrowed down your list to the best fit for your needs, you then will be able to choose from a variety of agent agreements. The main types of agent relationships include the following:
- Exclusive Agency Agreement: This involves using the services of a single agent, with the same fee paid no matter how the home ends up being sold.
- Sole Agency Agreement: In this type of arrangement, the agreement is virtually identical to an exclusive agency agreement yet also gives the owner the right to sell the house privately. If the house is sold privately, the agent’s fee does not need to be paid.
- Open Agency Agreement: In this agreement, the seller can hire several different real estate agents. The agent who eventually sells the home is the sole individual who is paid a commission. This type of agreement can be beneficial in that you will receive marketing coverage from different sources, but it can potentially take longer to finalise a sale. This is because estate agents tend to prioritise their exclusive sales, putting your home lower on the priority list.
- Auction Agency Agreement: This agreement refers to when the agent is responsible for organising the auction of a property.
- Multiple Listing Agency Agreement (Multi-list): Another option that is similar to the exclusive agency agreement, this allows one estate agent to sell the house with the coordination of other multi-list agents. This can open up the property to a wider net of potential buyers.
You may be interested in learning more by reading the following articles:
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