ESTATE AGENT'S COMMISSION

ESTATE AGENT'S COMMISSION- The other side of the coin

With so many fixed/low commission agencies entering the market, I've felt the need to explain our position as an agency which charges 5% commission.

As a full service sales and rental agency, real estate is our core business, our priority and our sole source of income. We are here to guide buyers/tenants and sellers/landlords through the purchasing/ letting process from beginning to end, starting with the personal market analysis on each individual property. After discussing the marketing price and plan with the owners, we will then take photos of the property. More often than not, this duty is outsourced to a professional photographer at extra cost to us. Once the photos are received, the property gets advertised on all the relevant portals. Not many people are aware that we have to pay for this service. In the case of rentals, credit checks need to be done on all suitable applicants. Yet again, a service we have to pay for.

As a traditional agent, one would often open the listing of a property up to more agencies, while still managing the whole process, thus simplifying the process for the seller, yet immediately halving our income, as we would split the commission 50/50 with the other agencies on board.

It takes numerous phone calls, emails and trips to organize and show a property to a prospective buyer- sometimes two or three times, without a successful sale. Once a buyer makes an offer to purchase, we take the time to explain the contract to the seller and the buyer, all the while negotiating the best selling price and suspensive conditions for the seller. Remember, we work for you! We often arrange the relevant certificates of compliance and even assist in organizing your move.

(In the case of rentals, we manage all the little niggles which ever so often appear.)

Once the sale is concluded, we closely monitor the transfer process in order to avoid unnecessary delays.

During the whole stressful period of marketing a property, we are here to assist you in whichever way possible to make sure the whole process from our first appointment to the day of the key-handover runs as smoothly as possible.

So why does CHAMPION Real Estate charge 5% commission? Let me give you an example of how much of that money finally ends up in the agent's pocket:

Say the total commission on a property is R 100 000. That sounds like so much. Of that, 15% needs to go to paying VAT, leaving R 85 000.

Now the agent needs to split that 50/50 with the company for overhead, leaving R 42 500.

Deduct 25% PAYE from that and it leaves the agent with R 31 875, from which one must still deduct petrol and cell phone costs and any additional advertising/gifts not covered by the company. (If it was a mini-listing, of course this must be shared 50/50 with the listing agent) From this example, one can clearly see that an agent needs to sell more than one property a month in order to earn a reasonable income. This is most often not the case.

Yes, we are willing to negotiate on commission, but remember- we fight just as hard for our commission as we ultimately fight to get you the best possible price on your property!!