Drop in commission a done deal for some

IF there is one tactic that residential property sellers should never adopt, it is trying to negotiate the agent’s commission down to ridiculous levels before they start marketing the property or give a mandate to sell.

This, says Bill Rawson, the chairperson of the Rawson Property Group, is a ploy which almost always has disastrous results.

“After 43 years in property marketing I am more than ever, convinced that good agents, those achieving the best results for their clients in the shortest possible time, have no need to accept commission cuts. In many cases, they will not only charge a full 7% commission, but they will only accept the mandate if they can have it on an exclusive basis,” says Rawson.

“Clients come to realise very quickly that with such agents, they are now getting a top class service and will achieve top class prices.

“This should therefore make them more than happy to accept the agent’s terms and conditions.”

On the other hand, estate agents who accept low commissions are all too often non-performers: the only reason they agree to such commissions is because their lack of success has made them desperate.

“In these cases, the client will often find that he is dealing with the sort of agent who has given the industry a bad name.

“This type of agent tends to be lax about responding to communications and he will also probably lack ability and the essential legal knowledge that goes into the compilation of any Deed of Sale or Offer to Purchase.

“Worse still, he is quite likely to prove an inadequate negotiator, with the result that he will only get poor offers.”

In general, says Rawson, respect for estate agents has improved since the new educational standards became mandatory.

However, he says, there is still a small minority of agents who should not be in the profession; and these are often the ones who will drop their commissions far too low.