I am currently in the process of getting a DA approval to build 4 units. My plan is to sell all OTP.
Although it is sitll early days, I have spoken to a few agents on what Commission I would be looking at and have been quoted 2.5% to 4%?
With 4 units to sell OTP, would it be logical to offer lower than I would if I was only selling one dwelling as they will be looking a t a nice bonus getting commission on 4?
Much Appreciate Everyone's input!
JohnScott No MatesParticipant@scott-no-matesJoin Date: 2005Post Count: 3,850
Depends what you’re after. A complete marketing package would cost you around 5% +gst as opposed to just the selling comms.PEACHYMember@peachyJoin Date: 2004Post Count: 78
In my experience on both ends of the stick I have found that your standard real estate agency will expect 2-3% and property marketers anywhere from 3% but usually 4-6%.xdrewParticipant@xdrewJoin Date: 2010Post Count: 479
Make the guys actually work for you and incorporate that into the commission structure !
You want it sold quicker and for that you are able to be more flexible on your allocation towards the agent.
So make him work for it .. extra incentives and commission bonuses if sold within a certain period !!!
It will get the agent to work harder to get that extra commission and get you a better deal across your way.
THINK SMARTER NOT HARDER !
In outer suburbs the stick tends more towards the 2.5 % to a 3.3% (3%+GST). Costs for advertising can either be inclusive in which case the agent will try to rush a sale thru on you, or they can be additional .. usually paid upfront.
In inner burbs they can go as low as 1% .. since the value of the property is usually significantly higher. Advertising on these sort of packages is usually additional (and even expensive!)
And yes .. a good agent makes a difference with selling your property. Make your better judgement on that.
Great input guys!
Where can I find examples or more info of incentives used by others to sell their property?
Also are CASH offers to agents legal?Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,018
John, on a separate note have you thought how you might finance the deal as i assume they are all on the 1 Title.
Yours in FinanceMick CParticipant@shapeJoin Date: 2010Post Count: 1,099
Depends on location….if it's in a high demand area, easy to sell and average prices are towards the med- higher mark ie within 10km of CBD it be under 1.5-2%.
All about location, prices of the property and demand in that area.TerrywParticipant@terrywJoin Date: 2001Post Count: 16,190
Not sure entirely what you mean Richard about financing the deal on the 1 title. What I can tell you is that I purchased the site cash and will be borrowing against it for the construction loan.IntrigueMember@intrigueJoin Date: 2010Post Count: 208
My understanding is that off the plan sales are much more difficult for the agent than established property, also it is my understanding that often an agent would not be paid until settlement of the property i.e. 12 months from the time of sale as opposed to 30days on existing property. These two factors would often suggest a higher commission level or alternate arrangement i.e. 50% at contract and 50% at settlement etc.christianbParticipant@christianbJoin Date: 2009Post Count: 386
You can suggest 2.2% + 10-20% for any amount beyond the reserve.mattstaParticipant@mattstaJoin Date: 2011Post Count: 604
Depending on the price of the unit: if it is high agents usually area to 1-2 % of commission. If the unit price is low they might settle for 3-4% or even higher in commission.
Thanks everyone for the input, it has definitely given me much food for thought.
Having said that I think at this stage I would probably consider the sliding scale approach.
Also does anyone know whether marketers only deal with large developments or also cater to the small developers ie. 3-4 unit sites.
With their pricing I have read that they do charge higher % as "Scott No Mates" has pointed out, but I also understand that they cover their own marketing costs. Anyone know much about this?
Thanks!Don NicolussiParticipant@donJoin Date: 2005Post Count: 1,086
John – my personal experience is that otp sales are harder just because some buyers and agents cannot visualize the project, that is, what it is going to look like. Your designer may be using revit or another program that is going to help you build 3d models etc but it may not give you the correct renders and art work that you would need for a full marketing package.
You will have to budget this in.
Is your market cold – warm – hot? Do you even need an agent. Are you building something similar to another project that is already on the market?Don NicolussiParticipant@donJoin Date: 2005Post Count: 1,086
John – also if you are selling something like this get onto rp data and do the comparables for every sale for the last 18months for your postcode. If you want to be thorough do a postcode check on a nearby but aspirational suburb to see sale prices in the better locations.
You will be able to compare listing price with sale price and this will be a good tool to help you pick an agent.Scott No MatesParticipant@scott-no-matesJoin Date: 2005Post Count: 3,850
I'd expect that you'd have done your expected sale prices before kicking off the development ie at feasibility stage and only be reviewing them on the basis of actual cost of construction, holding costs and state of the market.
Yes I have had several advertising packages quoted to me by Agents. I do believe in investing in good quality 3D images to give the prospective buyer as much visual information as possible. When the time comes, I will also have a display board at the agents office which will have samples of the tiles, flooring, colours, brick, roofing etc. This gives the buyer something to touch and feel and also better visualize what they are buying. Also addresses of other recently finished developments that the builder has built and even get permission from the current owner to have the prospective buyer look through.
Data Subscription is a great tool, and should only be the start of a developers research. I like to hit the pavement and look at open for Inspections, check at the finishes, proximity to amenities, and talking to many agents. This in conjunction with the Data will give a more accurate picture of the End Sales prices I may expect in the current market, than just relying on the data.
JohnTinimMember@tinimJoin Date: 2013Post Count: 8
What's the commission range for luxury properties in the range from $3 million and above (marketing included, off the plan sales)?Richard TaylorParticipant@qlds007Join Date: 2003Post Count: 12,018
All comes down to negotiation.
You could still be looking at 1% + depending on the location.
Yours in Finance