Incentivising estate agent

B

Billy Baltic

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Firstly, this is not a "go" at estate agents, purely a discussion topic.

I will be putting a property on the market before the end of the year. I'm believe I'm realistic about the market thats out there and the fact I'll be selling for 50% - 60% of the purchase price. I've spoken to a number of estate agents and find them to be very negative about the market. I think they are doing so to set themselves a lower bar which is more easily achieved. I would probably do the same in their shoes. However this by its very nature takes the emphasis over pushing for the best price.

To counteract this I was considering agreeing a standard % for a sale at "regular" market price and a much higher % should the estate agent excel (e.g. 1.5% up to 200k and 20% on anything over 200k).
Obviously a bit of thought would need to go into the incentive level.

Has anyone tried or heard of anything similar and how did it work out? Any thoughts in general?

Thanks in advance.
 
Billy Baltic said:
Obviously a bit of thought would need to go into the incentive level.

Has anyone tried or heard of anything similar and how did it work out? Any thoughts in general?

.
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Instead of a percentage might be better to go with an actual figure for the auctiooner, if he gets over 200K then he gets 1/2/3 K more - in addition to his percentage fee.
 
The market itself dictates the number and price level of offers you might receive. No Estate Agent will be able to generate this market, and if you wish to make a temptation offer to the Agent, it's your money, but don't expect miracles. Something that is almost dead can't be awoken too quickly.
 
mercman said:
The market itself dictates the number and price level of offers you might receive. No Estate Agent will be able to generate this market, and if you wish to make a temptation offer to the Agent, it's your money, but don't expect miracles. Something that is almost dead can't be awoken too quickly.
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I agree with elements of this Mercman but if it were that dependant on the market people wouldn't use estage agents at all - they'd just post an ad.
 
It also depends where you're selling? There is a demand for properties in certain locations e.g. South Dublin and older settled "non-Celtic Tiger" housing estates etc.
 
There was a book out some time ago, Freakonomics, which had details of a study done on estate-agents' own house-sales - this, as you can imagine, is where they themselves were as incentivised to the nth degree.

Study found that their houses remained on the market for that longer than the average house sale as they didn't have to earn commission on it.

I think what you're trying to do is good, but you'll never achieve an optimum result.
 
The percentage method vs the firm figure over a certain amount has the benefit that the sale wont stop on that amount+1.

The best suggestion is the try vet the EA first. I've noticed that the really good ones are visible within about 5 minutes of a viewing, the really bad ones are quicker to spot. So find a property in the area and try to arrange a viewing, but refuse the first offer they give you. A lot of the bad EAs offer to call you back but then never do, even when you follow up a second time.
 
If you know the market as well as you say you do, then you'll know what price the house is going to sell for, or near enough. We have all heard of the semi-detached that went way over asking price, there's not too many of that type out there. This may be clouding what you think an auctioneer can achieve. It's not rocket science.
 
Anything you can do to make the house more attractive. I see some stuff for sale and a tidy of the garden and a lick of paint would go a long way. Look at other houses in the area, and the more attractive ones, see whats different and emulate it.
 
not done a fixed fee but what we did was waited until the house across the road was sold, went to the EA and told them to send the underbidders overs to us and then we between myself and our neighbour we agreed a joint fee for the 2 houses that was cheaper then if we had both gone seperately to the EA. From our perspective we needed a quick sell for a number of reasons, not least to avoid getting stuck in a long chain in what we were buying and it made sense all round
 
DingDing said:
I see some stuff for sale and a tidy of the garden and a lick of paint would go a long way.
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In the current market with serious lack of supply issues, agents are generally advising that cosmetic updates aren't really worth spending much time or any money on.
 
presidenttttt said:
Has anyone done something like this?
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Not a fixed amount, but we did a higher commission rate if house sold above the higher end of estimate.
E.g. house valued at 600 - 640k. Put on market at 600. If it sold for anything less than 640, commission was 1%. Above 640 and the commission was 1.5% (of the total).
It's a common enough approach with some of the larger agents.
 
I'd have no problem agreeing to that. However, I would be 100% sure of what I felt the property could achieve in the 1st place.
Irish people feel that Estate agents/auctioneers charge too much? Go abroad and you'll get a surprise.
 
noproblem said:
I'd have no problem agreeing to that. However, I would be 100% sure of what I felt the property could achieve in the 1st place.
Irish people feel that Estate agents/auctioneers charge too much? Go abroad and you'll get a surprise.
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Portugal 4%, usually 5%.
 
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