In most financial situations, spending the least amount of money on fees and charges is probably your highest priority. When it comes to our taxes, we aim to minimise our obligations and account for all our deductible expenses.
In fact, some of the only times we think twice when it comes to fees and charges is for products and services. For example, none of us wants the kettle that breaks the first time it's boiled and an accountant with higher qualifications might just be worth the price.
The fees and charges for real estate agents are tied up in some of the most significant transactions of our lives – buying and selling property. That’s why real estate fees are one of those circumstances where you should think twice about choosing the lowest price.
Being wary about real estate agency prices doesn’t mean you should automatically choose the most expensive agent. It’s also important to have an honest conversation about the fees and charges you can expect when selling through an estate agent.
A trustworthy New Zealand real estate agent will be happy to have this conversation, which will – at the very least – give you an indication of the quality of your estate agent.
Generally speaking, real estate fees for vendors will include:
• a small percentage of the sale price as commission
• a one-off administration fee
While you shouldn't be shy about having the conversation around fees, enlisting the services of the company with the lowest fees isn't always the best idea. The quality of your service could be dependent on the price you pay and when it comes to real estate, while in the short term it seems like a great idea, poor services could hurt you in the long run.
Here are a few things that may go wrong with the lowest price estate agents:
• Marketing mayhem: actively and accurately marketing your property is the key to sales success. A low-price real estate agent may charge extra, sometimes exorbitant hidden costs for these services, and that's the best-case scenario. In the worst case, marketing will either be underfunded, poorly focused or even non-existent. This could seriously hurt your final sales figure, making the higher-priced agents seem like a bargain. To sell your home well, you need a comprehensive and well thought out marketing package.
• Inexperienced and under committed: while real estate agents are regulated by the REAA, levels of service will still vary across the industry and extra-low prices can sometimes be the first warning sign. Sometimes poor service will simply be the result of inexperience while at other times it might be a sign of an overworked agency. The important thing to remember when comparing prices is to find an experienced real estate agent who can offer personalised service for you.
Equally, that experience should be local to your area. If you’re looking for a real estate agent in Rotorua, they should be up to date with all things Rotorua and the market in the area.
If you’re looking for professional real estate agents with a transparent and competitive fee structure, look no further than EVES. We put our clients at the centre of everything we do to achieve results that exceed industry averages. To buy or sell property in the Bay of Plenty, Waikato or Northland, contact your nearest EVES office today.