Choosing the right real estate agent?

[Hiflyer]

Ok I can't be bothered reading all the posts so sorry if it has already been said, but my mum used to work for Ray White, and they rip you off according to her, and my GF's mum is selling her $3.4mil (down from $5.5mil) house through Barfoot and Thompson so that has got to say something...

PM me if you don’t believe me, I'll prove it to you.





Jordan

[MaxB]

Yes, this is what I'm thinking myself but I don't know to ask him to drop the commission. They charge 3.95 on the first $400,000 then 2.5 percent on the remainder. A company like Ray White is 3.95 on the first $250,000 then 2 percent on the next $300,000. Should I be aiming to get the commission down to the level of the other company?

So the agent would get about $17k on a 450k house which is by no means unusual these days. For doing what exactly? No wonder it is an unpopular profession.

AFAIK European agents get 1-2% and they seem to do alright.

[awayatc]

my GF's mum is selling her $3.4mil (down from $5.5mil)

PM me if you don’t believe me, I'll prove it to you.

Jordan

Could you PM me picture of your GF's Mum....?

[shafty]

Hi MotoGirl, you know where we lived (<1 km from you and Cajun) - we managed to sell ours privately for $500,000. More would've been nice, but we did great considering all factors involved.

Shelley St was approx our 7th private sale over the years and since I've been in sales for years couldn't see what someone else could do that I couldn't.

For example, I gave the neighbour who is an Agent, the opportunity "to pitch" for the sale - he brings his "Skite book" over..........."I sold this house on the first open home, - and this one on the second open home" etc HELLOOO, just a reminder as to why I should again do it myself - imagine a few weekends work, ME paying the advertising and him collecting $XXXX?

Another Agent knocked on the door and said "I have a client who loves this street and has just sold her home blah blah" . Because we knew the Agent, gave her the chance, the mystery buyer never materialised even months later.

I know at least one Agency has a reputation for "over valuing" to get the listing = and then there's the "lets see what the market tells us blah blah" - in other words using the public to bring the price down.

All said and done the market will tell you, but I have found by spending money on getting some professional photography done, using TradeMe, getting photo signs made up for the front lawn, timing MY open homes (which are essential) with other Open Homes near by, arrows on the corner and a professional Open Home Flag (have one for sale BTW!) and colour printed flyers and open home register when people arrive, has saved us thousands.

I tend to let people wander around (so long as not dodgy) and have one more than 1 occasion given (admittedly someone I sorta knew) the house key for the afternoon "Heres the key take a few hours to have a look around, make a coffee etc and leave the key in the box" Puppy dog sale.

Good luck!

[MotoGirl]

Can someone explain why nobody (ok not exactly nobody) selling a house in this country is prepared to put a price on it? When we were hunting for our current place I got sick and tired of going to open homes and having the agents ask how much I thought it was worth...the look on their faces when you say "You're the expert, you tell me..."

An agent would tell you this is because he or she doesn't know how to value the house. This is the line of shit we got fed because (apparently) there are no comparable houses in our neighbourhood. Houses like ours aren't overly common because it has 3 bedrooms, an office, storage room, and 80sqm of garaging - all within 5 minutes drive of Tauranga's CBD.

We got told to drop the price to compete with lower spec properties, which were also further away from town.

[vifferman]

It bugs me that agents don't work for the person they're representing (buyer or seller) but solely for the commission. If they're supposed to be selling the house for you, then they shouldn't be pressuring you to drop your price. They do so, because it makes very little difference to their commission, but a LOT of difference to you. Also, it pisses me off that you have to pay for all the expenses incurred, on top of the commission, yet you are the one taking all the risks. We were fortunate with our last sale (Tauranga) in that all the costs were covered by my wife's employer, otherwise we would have lost a lot of maney on the sale. As it was, after two years of ownership and putting $15k and a LOT of effort into making the house less shitty (I completely rebuilt the kitchen), we broke even.

The house before that (Christchurch), we got the agent who'd helped us when buying it to give us a free valuation. We then had a sign made up, put some ads in the paper and in the school newsletter, and sold it within a week for what we wanted for it. Cost? Around $300, most of which was the sign. We were fortunate in that it was a popular area, and we had quite a bit of passing traffic.

[Winston001]

Ok, if you want to know what your house is worth, here are a couple of baseline methods:

1. Calculate the investment return. In NZ the long-term average for residential property is 7.7% (sounds a bit low to me).

On $500,000 that requires a rental of $740 per week. Would you get that? If so, the price is fair.

2. How does the price fit as a multiple of the average income for the area? Historically NZers have priced houses at 3.75 times the average income. Higher income areas have higher prices.

However by 2007 we were buying houses at 6 times the average income. That could never continue.

Everything ultimately comes back to average. Don't believe that? Have a look at our sharemarket.

[sidecar bob]

Have to say, that kiwibiker is probably not a bad place to advertise a property if that meets the site rules.
Thanks for the tour Motogirl & Cajun.

[HenryDorsetCase]

An agent would tell you this is because he or she doesn't know how to value the house. This is the line of shit we got fed because (apparently) there are no comparable houses in our neighbourhood. Houses like ours aren't overly common because it has 3 bedrooms, an office, storage room, and 80sqm of garaging - all within 5 minutes drive of Tauranga's CBD.

We got told to drop the price to compete with lower spec properties, which were also further away from town.

you had me at 80 sq m of garaging. If its got two bathrooms I want it myself. Shipping cost to christchurch?

good luck!

[MotoGirl]

Ok, if you want to know what your house is worth, here are a couple of baseline methods:

1. Calculate the investment return. In NZ the long-term average for residential property is 7.7% (sounds a bit low to me).

On $500,000 that requires a rental of $740 per week. Would you get that? If so, the price is fair.

Everything ultimately comes back to average. Don't believe that? Have a look at our sharemarket.

So if it's only worth half that to rent, I should sell it for $250,000? Jesus, even I'd buy it for that!

[HenryDorsetCase]

Everything ultimately comes back to average. Don't believe that? Have a look at our sharemarket.

indeed there are some stellarly average performers there.

[MotoGirl]

you had me at 80 sq m of garaging. If its got two bathrooms I want it myself. Shipping cost to christchurch?

good luck!

Did I forget to mention three toilets?

[HenryDorsetCase]

Yes, this is what I'm thinking myself but I don't know to ask him to drop the commission. They charge 3.95 on the first $400,000 then 2.5 percent on the remainder. A company like Ray White is 3.95 on the first $250,000 then 2 percent on the next $300,000. Should I be aiming to get the commission down to the level of the other company?

if you're paying for advertising offer 2.5% including GST. Are there any 1% agents up your way?

Oh and you know my advice. sell it yourself. be prepared for the ex-agent to badmouth the property to anyone who will listen though.

[HenryDorsetCase]

Can someone explain why nobody (ok not exactly nobody) selling a house in this country is prepared to put a price on it? When we were hunting for our current place I got sick and tired of going to open homes and having the agents ask how much I thought it was worth...the look on their faces when you say "You're the expert, you tell me..."

When I get around to moving on, I'm just going work out how much I want for it and put it on sale for that +10%. Works fine in London why not Auckland? When it comes down to it, with an agent you're paying for one thing only - their mailing list.

when did you buy? if it was a year or 18 months ago, they were shit scared to quote a figure because people would (and did) pay ANYTHING. Agents were continually surprised by prices and so didnt want to commit.

Now its the opposite. no one knows what anything is worth.

and if you think its bad being an agent. talk to a valuer. they are having quite the hard time at present. And they know if they get the figure wrong it can totally bite them in the ass. Hilarious.

[MotoGirl]

if you're paying for advertising offer 2.5% including GST. Are there any 1% agents up your way?

Oh and you know my advice. sell it yourself. be prepared for the ex-agent to badmouth the property to anyone who will listen though.

I'm not aware of any 1% agents in this town. What's the deal with enlisting an agent but also having the right to sell it privately and doing what Shafty mentioned?