By far the greatest cost when selling a property is the estate agent’s commission. It dwarfs other costs such as those of obtaining compliance certificates.
Therefore, if you pay a lower commission, you will end up with more in your back pocket.
A traditional agent may argue that they will be able to sell the property at a higher price, so after deducting their high commission, you might still come out ahead of a low commission estate agent.
But this argument doesn’t stack up. Modern buyers are savvy and informed. They have online access to the same local property valuation data as estate agents and so the days of being able to sell a property for more than it’s worth are long gone.
In fact, in the FNB Property Barometer of 3 October 2017, John Loos advises that 93% of all sellers sell at below their asking price and that the estimated magnitude of the discount is now 9.8%.
As low commission estate agents, we do sometimes achieve a selling price greater than the original asking price in a high demand situation, but this is the exception (particularly in current market conditions) and is certainly not possible for every sale.
A property is often an owner’s major financial asset so it is important to get the valuation right upfront. In our business, we provide a Comparative Market Analysis and we advise sellers to get a second opinion, whether that is from a professional valuer or a local estate agent.
David de Waal (CA(SA))
CEO Steeple – The Low Commission Estate Agents
082 901 0730