The hidden cost of a cheap agent

By April 27, 2017Latest, Selling

Choosing an agent when selling your home is a big decision – this is why many people research a few different real estate agencies before they make their choice. Costs can add up quickly when selling your home, which is why some people consider hiring a discount agent to help cut costs. In theory this might sound like a great idea, but the team at Wilson Real Estate have explained why this could end up costing you a lot more money in the long term.

What is a discount agent?

You’ve probably heard agencies boasting of their capped commission or offering the lowest fees in their area. Sounds like a great deal for sellers, doesn’t it? As the old adage goes, if it sounds too good to be true, it usually is.

What are the downfalls of a discount agent?

Discount agent’s work on a model of stock turnover, which to them equals a steady cash flow. In essence they turn your property into a commodity, focusing on turnover of stock, rather than achieving a high quality result. The discount agent is more concerned with getting the property sold, to survive, regardless of the price.

This will often lead to a lower price. After all, why would the agent try to get the highest price for your property when they could get a mediocre price and get the deal done? You might save some money on the agent’s fee, but end up with less money in your pocket after the sale. Don’t forget, the final figure you receive is more important than a lower commission.

Furthermore, many agents offer low fees but will have high marketing fees or upfront advertising costs. These additional extras can quickly make low commission fees redundant.

At the end of the day, you pay for the service you get. If they are quick to give away their own money, what will they do with your money during negotiations with a potential buyer?

The lesson

Picking your agent based on a discounted fee is rarely a fail safe option. When selling your home, you want the best possible negotiator – and by definition they don’t work in discount agencies. Do your research and pick an agency that meets all your needs, rather than choosing the cheapest.