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Three Tactics Agents Use To Charge You More Commission
Selecting an agent comes down to many factors. One of them can be what they charge. What I have come to discover over the years is not just the rate they charge, but how they go about communicating this figure. I am a big believer in paying for an outcome so when the commission figure is washed over, buyer beware. If an agent is more focus on tactics to get the most out of you rather than the sale of your home, then they may not be the agent you want.

Tactic #1

Adding the GST after the fact. I hear it all the time that there may be a little negotiation on commission rates and the agent agrees to drop their rate and you agree. When they fill out the paperwork they then add the 10% GST which in many cases is $2,000 more. It becomes an awkward conversation and one they often won’t back down from knowing you have chosen them already.

It can be easily avoided by making sure you use the word including GST in all your conversations so there can be no confusion.

Tactic #2

Having a bonus structure. I’ve never understood paying an agent more to ‘motivate’ them as if they are responsible for the price received. They need to facilitate this process and do it skilfully. If they sell for $50,000 above reserve it was because a buyer was willing to pay this anyway and the agent just did their job.

You also have to be careful of the ethics behind a bonus structure. Agents have been known to set a low base figure knowing that they will far exceed this figure. They then charge 5-10% (or more) bonus for achieving the higher price leaving the vendor with a hefty commission bill. Many see it for what it is, but others praise the agent for a great result whilst not understanding they have been conned.

If you want to have a bonus structure, by all means go for it, if it is vendor driven I am OK with it although I still think a single commission figure is or a flat fee is the way to go.

Tactic #3

This is not so much a tactic but a way an agent will stand their ground. Ask them “Is your commission negotiable?” An agent will often say no, especially if they believe you have already chosen them, but that is not the truth. Commission is always negotiable and it is not just your listing they are trying to win but your neighbours. Their signage will be outside your home so it gives them a reason to connect with potential future sellers, that in itself has value. So, it is not just a few thousand dollars they are giving up to give you a better rate, but potentially tens of thousands in other listings.

Yes, I admire the agent who stands their ground and if the commission is fair I will not try and screw them to save a thousand dollars. Ask the question, and if it is no thank the agent for their time as you have others to interview and you may get back to them later!

Undercover agent is your buffer when talking to agents about commission. We ensure that your commission rate is fair and that the agent is not trying to take advantage your circumstance. Like a recent example where an agent quoted $19,000 more to a lady in her 70’s thinking it was an easy sell. We got involved and got a fair figure, but then after discussing how the agent was prepared to rip them off, we agreed it was best she choose another agent. This is just part of the support and protection we are proud to represent.
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