Research shows estate agent commissions are too high

by David de Waal on March 26, 2014 0 comments

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With the spiralling cost of living in South Africa, many people are looking for ways to cut down on unnecessary expenditure. We set out to research whether South Africans consider the high level of estate agency fees to be justified.

The research, carried out on our behalf in an anonymous online survey, shows that 96% of South African homeowners are unwilling to continue to pay the standard 5% – 7% + VAT commission on the sale of their property, just so that estate agents can have an expensive office on a main street.

In fact, 99% of respondents said that they were more than happy to do some of the less essential tasks themselves – like showing prospective buyers around their property – if it meant paying a lower commission on the sale. Obviously, this survey result was music to our ears!

On the basis of the research, 94% of South African homeowners understand clearly that the low cost estate agent model means a focus on the key sales tasks, combined with a significant financial saving on the sale of their property. As many as 85% of respondents now believe a low cost estate agent to be an equally credible a way to sell their property as a traditional estate agent.

A surprising 68% of homeowners went so far as to say that the traditional commission structure was unfairly generous to estate agents.

The research showed that over 70% of potential property sellers believed that estate agents needed to focus on marketing their property, as this was the most important task. They also relied on their estate agents to set a fair and achievable selling price for their property. Aside from these key tasks, they were happy to do things themselves.

Conclusion

At the risk of being controversial, the time for traditional estate agents with fancy cars and big offices is over. Online is the place people start all their property searches, so it makes complete sense to set up base camp there and focus 100% on getting the best price for the property, as quickly as possible.

Do you think that traditional estate agents with their high commissions will become extinct?

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