In a recent online survey we asked…
“Do you think in general the traditional real estate fee model offers clients value for money?”
So far 88% of respondents have said NO.
Interestingly, the other 12% were real estate agents.
In the same survey 82% think traditional real estate fees are too expensive.
So it’s clear that consumers in general question the value of traditional real estate fees. However, few seem to understand exactly how they work and why they are so high.
One reason, is simply because they are contingency based, which means you only pay a fee if you sell.
On the surface this seems good for you. If at the end of the day you choose not to accept what the market will currently pay for your property, or change your mind and decide not to sell, then putting your property on the market will cost you nothing.
However, this also means the agent carries all the risk of spending marketing, time and effort without the guarantee of being paid, and is the very reason why traditional commissions need to be so high, when you do choose to sell.
It’s just basic economics… High Risk = High Return.
Or put another way … The less risk you take = the more you pay if successful.
Agents often do an excellent job, work long hours and through no fault of their own, their client (the seller) decides not to sell and withdraws from the market. The agent gets nothing and therefore looses time and money.
On average approximately 65% of properties that are put onto the market, actually end up selling with the original agent.
Therefore, the industry needs a lot higher payout from the successful sellers to cover all the work and expenditure spent on the clients that don’t sell.
When you think about it, it is a very inefficient model.
Genuine sellers that present their property well, price it realistically and sell relatively easily… are effectively subsidising the clients who choose not to sell.
At Restate, we believe it’s time you as a seller, at least had a choice.
So in addition to the traditional commission only fees, we have developed several modern and more efficient fee structures,
where the quicker you sell, the more you keep.
So far, 75% of our clients are choosing one of our new fee models, and they have ended up saving an average of over $5,000 compared to what they would have paid us under the traditional model.
#Restate, #ChangingRealEstate #RealEstateTimaru