Apartment Specialists Podcast No: 23
Is this true – Not all agents get paid the same? Well, we will discuss more about this myth on this podcast.
Good day. Andrew Murray, Apartment Specialists talking about the Auckland apartment market.
This is an interesting one – Not all agents get paid the same. That’s quite a myth. You would think real estate agents all get the same – the owner pays a commission, they get their cut. This is actually not the case. A real estate agent is judged by their agency according to how much commission they bring into the company. Not if they get highest prices, not if they do the best job but how much money they bring into the company. What happens is the more money they bring in, they get a higher percentage of that commission. So what happens is, if a vendor pays $10,000 dollars towards an agent. If they are a beginner agent, they’re probably going to get most likely about 50% of the commission. So 50% of $10,000 – if they list and sell a property goes to the agency – and 50% goes to the agent. Now, as an agent brings in more commission, their percentage will change.
A top agent may get 70% to 80% of their commission. This has quite a few implications because if you go through – if the lead comes through a company – as in the agency – the boss will more likely put that lead to where they’re going to receive the most money. When you think about it, if the agency is going to get $5000 off one deal and $2000 if they direct it to a more experienced agent, they’re going to give it to the least experienced because they’re going to make more money. There’s a bit of a conflict there.
So always, never choose the agency. Choose the agent. Also, when you’re choosing your agent, always ask for the history of the sales and how they stacked up. Because in the Auckland apartment market ,you can’t really tell who’s getting the highest prices unless if you ask them to show you their previous sales and how they stacked up – how they ranked -and the building they were sold in. They’ll tell you if you’re dealing with the agent you want to deal with.
Just a recap – Not all agents get paid the same. So never go through an agency. Call up the agency and go – I’m looking for an agent to represent me – because you’re most likely not going to get directed to the one that’s best for you. You are going to get directed to the one that’s on the lowest cut. I hope that helps.
Next week, I’ll be talking about sole agencies and what happens when you want to get out of one. How is this dealt within the Auckland apartment market? Do they let you out of a sole agency?
Anyway, thank you.