It seems as though every day you see ads on television or the web for businesses that will link you up with the “best agents” in your area and they tell you that they will do this at no cost – to you. In reality there is a very big cost to the consumer by using one of these services and that is because they charge the participating agencies a referral fee that varies between 15% and 20% of whatever commission that you agree to pay the agency on a sale.
- Tags: real estate agent, real estate commission, RateMyAgent
These businesses only work with salespeople and offices that are prepared to pay them the referral fee. So, you don’t hear about good agents who are not prepared to go along with this arrangement.
"Once you start chasing low commission with participating agents you are, in all probability, involved in a race to the bottom to see how low the agents will work."
The best agents are more likely to pull out for this kind of “dutch” auction earlier than the not-so-good agents. It all depends on how much stock they are carrying and how much money you are prepared to contribute toward the marketing of the property. In all likelihood you would get a better deal on the commission and the marketing if you dealt directly with the agent of your choice rather than one that has been referred to you by a lead generation company.
Why is this important? One example is advertising on realestate.com.au. The only package that can get you on page one and keep you there for 45 days is a Premiere listing - on contract rates this can cost us around $950. If the agency doesn’t have a contractual arrangement with realestate.com.au then a Premier listing in this area will cost you about $2000. Any agency that is carrying the marketing cost will not mention the Premiere, at most they will probably offer you a $400 feature property that will place you straight on page 4.
Since deregulation, everybody is much more flexible than they used to be about commission and marketing fees and most agents look at the bottom line of the transaction after accounting for everything they may have to pay. As a point of clarification, RateMyAgent is not a lead generation business. Their data is publicly available without restriction and does provide a reasonable guide to the how the client's feel about the agents they have dealt with.
If you are considering using a lead generation site you should enquire as to how they make their money, what they charge the agents, whether the agents are paying for preferential promotion and how their business model actually works.
by David Hamilton Finding A Real Estate Agent Online - What You Need To Know
palmbeachfn.com.au June 2016
First National Palm Beach
15 Palm Beach Ave Palm Beach, Queensland 4221
Phone: 07 5559 9600