What fee should I expect to pay?

You want the highest price for your property which means you want the highest dollar value in your hand at the end of the process. This is your net return from the property when you take off agent fees, marketing and the separate fee from a settlement agent/solicitor.

To achieve this, most sellers are tempted to select the cheapest agent with the lowest marketing budget. This can be a huge mistake. Agents who cannot offer anything of value or a proven strategy that achieves results often go to a cheap fee to obtain the business. These agents also have no skill in explaining on the importance of marketing and the reasons they are worth the industry standard fee.

A good way to test an agent on how they handle important questions is one I hear commonly at home opens every week.  - How much do you think the owner will take? You would be surprised at how many agents freely give away your price in order to get an offer and a sale. Should your home be listed at $500,000, but you would look at anything over $470,000 and the agent gives this away, the saving of a few thousand dollars in fee can results in 10s of thousands of dollars less in your hand. These low fee agents often have little or no negotiation skills and offer little or no service and communication.

A professional real estate agent will be able to demonstrate value for the fee they are going to be paid.  Please note that mulit million dollar homes have a lower percentage as the fees are generally on a sliding scale.  Real estate fees are de-regulated therefore negotiable and if it comes down to it, an agent may agree to drop their fee slightly when you actually receive offers and know how much you will have in your hand after taking an offer. The time negotiate should really be at time of sale when you have seen the level of service, communication and results the agent has achieved for you. It’s unfortunate that the time most people negotiate is at the start. Some people like the idea of a percentage fee as they think that the agent will work harder as the more they achieve, the higher their fee will be. This does motivate some agents but a long term agent will be just as happy to know that they achieved the best price from the market and will hopefully have a client for life who will also refer family and friends to them. Some other things to consider and maybe ask your agent is:

What questions will you ask when writing up the offer? Will they spend an extra 20 mins with the buyer after writing up the offer trying to get them up in price or are they more interested in just getting you your price?

How will the clauses be written to protect you? A vague clause can cost you a great deal of money in the future and leave the buyer in a situation where they can walk away leaving you to have to take your property back to market and find another buyer.

Will you be able to look back at this transaction in ten years and feel comfortable you got the absolute best price from the current market? Hire a cheaper agent that takes short cuts and you will never know for sure….