Let’s face it, hiring a real estate agent is expensive. So you want to know they’ll sell your home for more, right?
Let’s explore this further.
Real estate agents today earn approximately 1-3% of a property’s sale price in commission. On a NSW home worth $1 million, that’s up to $30,000. With this in mind, they need to make up at least this much over your reserve price to make the cost of their commission worthwhile.
So, let’s unravel the role they play in selling your home and whether it adds up.
Yes, real estate agents spend hours organising marketing material and prospecting and liaising with potential buyers. There’s no question this level of work soaks up time and requires expertise. However, what’s difficult to prove these days is how much impact their role has on the actual sales price of a home. Real estate portals like realestate.com.au and Domain offer highly targeted search facilities, so buyers have direct access to suitable properties without the need for high-scale marketing campaigns and prospecting.
Access to buyers.
Real estate agents often speak of building client bases and connections they can approach with property listings. However, these days over 80% of buyers research properties online before even speaking with a real estate agent. So as long as your property is listed through the major real estate portals, relevant buyers can find it all by themselves.
Knowledge & expertise.
Real estate agents spruik their sales skills, and understanding of their local market. It's true that they can help you set your sales price and conditions and negotiate with potential buyers. However, there are the formal education requirements to become a real estate agent are very minimal. Almost anyone can become an agent with relative ease. Accordingly, the skills and levels of expertise vary enormously from one agent to another. Also, many of the tools and resources agents use to determine sales prices and research information are readily available for anyone to use online.
Many real estate agents are well respected and liked within their communities. They spend years providing a loyal service to clients, which serves them well when it comes to selling. Having said that, many buyers are skeptical of real estate agents. In fact, according to an annual Roy Morgan survey of 30 professions, real estate agents rank as one of the least reputable professions in Australia, rated little higher than advertising and car sales professionals when it comes to trust and honesty.
Make your own choices.
Because it’s been ‘the norm’ hiring a real estate agent for so many years, most sellers do so without considering all of their options and whether the agent can actually make them more money. With commission rates so high and changes in buyer behaviours and technology, it's unlikely (at best) that an agent would secure you a better price than you could yourself, with the right help. You now have alternative choices so, make sure you weigh up all avenues available to you and pick the right choice for your situation.
After more information about this topic? Watch our video 14 things most real estate agents won’t tell you .