Should Owners Negotiate Commission When Selling Apartment?
This isn’t a straight forward yes or no answer but it is a tool that can be used as an owner.
A strange concept coming from an agent we know, however use the commission as a negotiating tool when choosing an agent. Letting the agent know your goal price for the apartment and then working it out from their may work in your favour in terms of increasing what you make. There is a point though where you have to be fair and ensure both parties are happy with the deal being made. Ensure this is all write in up formally to avoid any upsets in the process.
Andrew Murray, Apartment Specialists. Today I'm talking about a really interesting question. Should you negotiate the commission you are being charged when selling your apartment?
Now, this isn't really a yes or no answer but I definitely would use it as tool. Now this is a very interesting question. And obviously a very interesting answer coming from a real estate agent. Because obviously, I don't want you to take down the commission. But what I'm saying is it is a tool for you as an owner. And if you look at a commission, it's like a carrot. The carrot and the donkey. The donkey goes for the carrot because the donkey wants the carrot. In the same way, the real estate agent wants the commission because he wants to get paid. Now, that commission is an attraction. So if a real estate agent in the agency lets other agents from different agencies have an equal commission split, then the commission amount is very important because all the other agents are also trying to look for buyers for your apartment, not just the agent you have employed to work for you. So, by reducing that commission, it is less attractive to other agents.
For example, if they have a very good buyer they want to get paid. Because, I mean let's be honest, that is the nature of the business. Agents want to get paid. They will direct their buyers to properties where there is a normal commission. If you reduce the commission, and especially heavily, that will often turn away agents. And often agents won't work as hard for you. I mean, it's not something that I want to admit to you but it's something that's actually the case. Because I've seen it with many agents. In that case, what I would do - I'm thinking if it was myself - is I have a goal. And the goal I want to achieve price wise. And then I'd use that commission as a tool. So when it comes to the agents bringing you offers and they are working for you - and if they're not getting you the numbers you want, I'd use that commission as a tool and say for example, "If this is the best you can do, I clearly told you I wanted x, y, and z. And, this hasn't been delivered. There's only one way I'd even start to look at this number. And that would be if you reduce the commission. And that way, it is actually lifting the price for you."
When it comes down to that, if the agent hasn't done the job or hasn't brought you the figures that they said they would or that you wanted, that is a very, very powerful position for you, as an owner, to be in. So what I would do is I'd use the commission as a negotiating tool. Because you can. A lot of owners think, "Okay, just because I put on the listing form that that is what the commission is, it has to stay like that." That is not the case, you are still in control, you are still the boss. So remember that. Use that commission as a negotiating tool.
What I'm going to talk about next is I see a lot of owners - okay, I see a lot of apartments marketed very poorly, and I think in my head and I speak to my colleagues and I go, "How does the owner accept that?" And, it's obvious that the owner doesn't know. He doesn't know what platform or what website their apartment's being advertised on or marketed on. What I am asking is, "How can an owner check that their apartment is being marketed correctly?" Because there are a lot out there that I look at and go, "Wow, if the owners see that, they won't be happy." That is what I am talking about next time. Hopefully, that will help you hold the agent that you employ accountable to how they are selling your property.
Talk soon, cheers!