When it comes to selling a property, there are many considerations for a seller to take into account.
In most cases, the goal is to sell the property for the highest price in the shortest time possible.
Sellers usually think that the agent who charges the lowest or the least in terms of commission and marketing is naturally the best choice. Or is this?
What if I said the most “expensive agent” was the best choice?
From my experience, what sellers really want is to maximise their bottom line (net the most amount of money) possible from the sale.
The bottom line is usually worked out as the sale price less costs such as marketing, commission, stamp duty, conveyancing charges and so on.
The bottom line.
If the goal is to maximise the bottom line, it is natural to assume that the agent who charges the lowest commission rate and the least for marketing is the best choice?
Let’s look at some numbers to see if this natural conclusion is fact or fiction.
Let’s assume that there are three agents who charge different commission rates and offer different marketing costs.
Agent C is the clear winner despite being the most expensive choice:
. $13,562 better than Agent B
. $25,500 better than Agent A
Surprisingly, as the table shows, Agent A the most “expensive agent” is the best option.
In fact, what the table shows is that the highest bottom line will be achieved by the agent who can or who is most likely to get the highest price for a property.
Even if other agents charge a lower rate of commission and none or less for marketing.
If more sellers know this, maybe they would go about choosing an agent differently?
As the truism goes, you get what you pay for.
While we are talking about money, $50,000 is a reasonable sum or a lot of money for most people.
Let’s say one agent achieved a price of $1,450,000 and another agent a price of $1,500,000.
A difference of $50,000 in price.
What’s in it for a Seller and Agent?
A difference in sale price of $50,000, a big deal to a seller results in only an extra $1,375 for an agent.
Simply, if an agent got an extra $50,000 for a sale, they would only make an extra $1,375 from it.
That’s why unfortunately, some agents don’t try too hard after they have hit a certain price point and not go the extra mile in getting as much as possible whilst negotiating with buyers.
It may seem counter-intuitive but “remember, the agent who gets the highest price for your property will achieve the highest bottom line for you, even if their marketing and commission costs are higher than the other agents.”
HOW TO MAXIMISE THE BOTTOM LINE WHEN SELLING YOUR PROPERTY by Jonzun Lee
Jonzun Lee is a trusted Brisbane real estate consultant and Licensed Real Estate Agent. Please contact Jonzun on 0418 885 708 for further information regarding your property needs.
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