{"id":22091,"date":"2018-08-20T01:00:21","date_gmt":"2018-08-19T15:00:21","guid":{"rendered":"https:\/\/realestatetalk.com.au\/?p=22091"},"modified":"2018-08-20T01:00:21","modified_gmt":"2018-08-19T15:00:21","slug":"sellers-drive-a-hard-bargain-with-agents-matt-mccann","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/sellers-drive-a-hard-bargain-with-agents-matt-mccann\/","title":{"rendered":"Sellers drive a hard bargain with agents \u2013 Matt McCann"},"content":{"rendered":"

Did you know that real estate agent commission rates on the eastern seaboard have fallen or remained flat over the past 12 months.\u00a0 It might not feel that way but Matt McCann<\/strong> says in one of Australasia\u2019s hottest cities it has dropped as much as 1.5%.<\/p>\n

Transcript:<\/strong><\/p>\n

Kevin:<\/strong>\u00a0 Real estate agent commission rates on the eastern seaboard have fallen or remained fairly flat over the last 12 months according to Local Agent Finder. Joining me from Local Agent Finder is Matt McCann.<\/p>\n

Matt, what do you put this down to?<\/p>\n

Matt:<\/strong>\u00a0 It\u2019s an interesting set of numbers for us. This is the second time we\u2019ve run this report, so it\u2019s the first time we have comparable data. It\u2019s across 5000 agents, so it\u2019s a really large spread of data.<\/p>\n

What we\u2019re seeing in the eastern seaboard particularly is that commission rates are starting to come under pressure. We\u2019re not seeing increases. We\u2019re absolutely not seeing increases. And when you start to think about New South Wales being slightly down, Victoria being flat, and Queensland being slightly down, you\u2019re starting to see what we think is the implication of having fewer transactions in the market.<\/p>\n

Kevin:<\/strong>\u00a0 Part of the study showed that Australia\u2019s highest average commission rate was coming out of Tasmania, 2.96%. It almost seems to me to be a bit of an oxymoron. More buyers\u2026 That\u2019s one of the most popular paths of Australian real estate right now. More buyer demand you would think would make it easier to sell.<\/p>\n

Do you think sellers are prepared to pay a higher commission to make sure they\u2019re actually getting top dollar?<\/p>\n

Matt:<\/strong>\u00a0 I think there\u2019s something in quality and commission rates and the way we think about commission rates, particularly as being gating items. We see that day to day in our service where if someone is too low in terms of what they\u2019re charging in their commission rate, then we know that there\u2019s a question mark over their quality. If they\u2019re too high and price themselves out, then they don\u2019t make the consideration set. Quality factors are things that most vendors will go to once they\u2019ve understood where the pricing fits, so it\u2019s getting through the gate.<\/p>\n

The piece about Tasmania is interesting, and it could just be that property prices have got ahead of where agents\u2019 commissions have adjusted. So, people have got used to basically paying near that 3% commission rate.<\/p>\n

With property values going up, as the market matures, we would probably expect to see those commission rates to come down, start to normalize nearer a normal level, say, of mainland commissions certainly on the eastern seaboard, which are much closer to 2% rather than that nearly 3%.<\/p>\n

Kevin:<\/strong>\u00a0 You\u2019re talking about lower transaction volumes compared to a year ago has seemingly started to put pressure on agent commission rates. So, I\u2019d question whether we\u2019re looking for better agents and not necessarily cheaper ones, Matt.<\/p>\n

Matt:<\/strong>\u00a0 We\u2019d absolutely agree with that, and part of the reason Local Agents Finder exists in this universe is to help people find those better agents and we use the quality markers. I think, generally though, for anyone going into a transaction at the moment, where there are question marks over the value you\u2019ll get at the other side is always going to question the cost inputs.<\/p>\n

I think that\u2019s always going to be part of the equation, which is to say \u201cAm I really understanding those things much better because there might be a chance that I don\u2019t make as much as I thought I might make on exiting either an investment property or a home?\u201d just because we are seeing values dip, again, a bit more extremely but particularly in the eastern seaboard.<\/p>\n

I think that\u2019s normal, but the real question will be the 12 months from now. If commissions have come under significant pressure and they\u2019ve come down a long way, that\u2019ll be showing us a really interesting trend that generally across the market, consumers think they can negotiate a lower commission. We don\u2019t think the data supports that just today.<\/p>\n

Kevin:<\/strong>\u00a0 I guess there\u2019s always a danger that people are going to judge an agent based purely on their commission. There are more important factors for them to take into consideration. Did your study reveal anything along those lines?<\/p>\n

Matt:<\/strong>\u00a0 It did, and our two years\u2019 worth of detailed consumer research around the behavior of vendors in selling their property and what they look at, the ultimate decision to shake hands with someone, put your name on a sale authority comes down to much less than about commission at the end.<\/p>\n

It really is about quality markers, so it really is about how you think that agent is going to deliver for you and get you the ultimate outcome. Ultimately, the difference of 0.25% in the commission rate, it might be $5000 to $10,000 on a really big sale. But actually, if that agent is getting me $200,000 or $300,000 more on an exit value, then that\u2019s not something you\u2019re going to haggle over.<\/p>\n

I think most people come into the process going \u201cHow do I find the agent that gets me the best outcome at the end?\u201d and they look at those quality markers. They look at market history: \u201cWhat have you sold in this area of a property type like ours?\u201d And also, they\u2019ll look at what people say about you and the experience, and clearly, that\u2019s a core part of our service.<\/p>\n

But commission rate is important because it\u2019s who gets on the short list. It really is a good determinant in who is one of the three agents that ultimately you\u2019re going to seriously consider and look at those quality markers?<\/p>\n

Kevin:<\/strong>\u00a0 How much of a determining factor is the skill of the agent as a negotiator to get a higher commission? Have you seen any evidence of anything like that, Matt?<\/p>\n

Matt:<\/strong>\u00a0 We have. If you rank the attributes of an agent that people want when we\u2019ve done this ranking, negotiating best outcome comes in at three or four. Understanding the market, knowing how to structure a campaign and how to market a property are probably the first two most people consider.<\/p>\n

But I think the interesting part about the negotiation piece is I think in markets where prices are going up, there\u2019s a little bit less pressure on that. I think we\u2019re about to see that become a perhaps a higher ranked propensity capability from an agent is now where we\u2019re seeing valuations not always meet vendor expectation.<\/p>\n

I think you\u2019ll be looking much more to ensure you have someone who really you can expect the best price for you.<\/p>\n

Kevin:<\/strong>\u00a0 Great talking to you, Matt McCann from Local Agent Finder. Thanks for your time, Matt.<\/p>\n

Matt:<\/strong>\u00a0 No problem. Cheers.<\/p>\n","protected":false},"excerpt":{"rendered":"

Did you know that real estate agent commission rates on the eastern seaboard have fallen or remained flat over the past 12 months.\u00a0 It might not feel that way but Matt McCann says in one of Australasia\u2019s hottest cities it has dropped as much as…<\/p>\n","protected":false},"author":176692473,"featured_media":22086,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,11,13,36,22,23,25,27],"tags":[101],"class_list":["post-22091","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-research-topic","category-selling-a-property-topic","category-sponsored-channels","category-trends-topic","tag-podcast"],"yoast_head":"\nSellers drive a hard bargain with agents \u2013 Matt McCann - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/sellers-drive-a-hard-bargain-with-agents-matt-mccann\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sellers drive a hard bargain with agents \u2013 Matt McCann - 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