Forums / Property Investing / General Property / What is the going Commission for Agents?

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  • Profile photo of marq001marq001
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    @marq001
    Join Date: 2009
    Post Count: 13

    Hi Everyone,

    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!

    Regards

    John

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
    Join Date: 2005
    Post 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.

    Profile photo of PEACHYPEACHY
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    @peachy
    Join Date: 2004
    Post 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%. 

    Profile photo of xdrewxdrew
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    @xdrew
    Join Date: 2010
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    Incentivise !

    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.

    Profile photo of marq001marq001
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    @marq001
    Join Date: 2009
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    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?

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    John, on a separate note have you thought how you might finance the deal as i assume they are all on the 1 Title.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of Mick CMick C
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    @shape
    Join Date: 2010
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    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.

    Mick C | Shape Home Loans
    http://www.shapehomeloans.com.au/
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    Same Banks. Better Rates. Served With a Passion.

    Profile photo of TerrywTerryw
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    There is usually a much higher commission for off the plan sales. They can be much harder to sell.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
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    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of marq001marq001
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    @marq001
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    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.

    Profile photo of IntrigueIntrigue
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    @intrigue
    Join Date: 2010
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    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.

    Profile photo of christianbchristianb
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    @christianb
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    You can suggest 2.2% + 10-20% for any amount beyond the reserve.

    Profile photo of mattstamattsta
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    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. 

    Profile photo of marq001marq001
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    @marq001
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    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!

    Profile photo of Don NicolussiDon Nicolussi
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    @don
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    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 Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
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    "I think of finance as a technology, a way of getting things done." Robert Shiller

    Profile photo of Don NicolussiDon Nicolussi
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    @don
    Join Date: 2005
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    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.

    Don Nicolussi | Mortgage Broker - Home Loan Warehouse
    http://homeloanwarehouse.com.au
    Email Me | Phone Me

    "I think of finance as a technology, a way of getting things done." Robert Shiller

    Profile photo of Scott No MatesScott No Mates
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    @scott-no-mates
    Join Date: 2005
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    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.

    Profile photo of marq001marq001
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    @marq001
    Join Date: 2009
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    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.

     

    Regards

    John

    Profile photo of TinimTinim
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    @tinim
    Join Date: 2013
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    What's the commission range for luxury properties in the range from $3 million and above (marketing included, off the plan sales)?

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
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    All comes down to negotiation.

    You could still be looking at 1% + depending on the location.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of TinimTinim
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    @tinim
    Join Date: 2013
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    Thanks Richard!

    Do you provide finance on Off-the-plan luxury purchases?

    Maybe I can add you as recommend to my clients. :-)

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