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Happens in Darwin ( private sale ) One of my son's bought privately... no issues... and an easy settlement....
We actually bought our place without agency (Friend of a Friend type thing), not sure what BCC is getting at, but doing the whole process free of building inspectors and solicitors, is possible, but also dang stupid at the same time (IMHO) , however no real esate agents are engaged as part of that process, which seems to be what the topic is about?
Thanks everyone, this is all quite interesting. In the US a buyer typically:
- Get pre-approved for a mortgage. This determines price budget they they can afford.
- Engage a "Buyer Agent". There is no upfront or "out of pocket" cost for this, so most buyers have their own agent.
- View with agent prospective homes that are listed for sale in the MLS (Multiple Listing Servivce).
- Make an offer through Buyer agent and sign once terms are reached.
- Schedule inspections, and perform any other due diligence.
- Renegotiate following inspection. Then either terminate or move forward.
- Close 30-45 days after offer made.
In the US it's typical that the listing agent charges the seller 6% commission, then splits that with the Buyer's agent. so each agents eanrs 3%. Paid at closing. If the sale does not complete for some reason, neither agent gets paid, in most scenarios.
Our commission structure is being disrupted by lawsuits and a recent settlement brought by sellers who feel like forcing them to pay buyer commissions is unjust. Going forward, listings shown on the MLS will no longer be allowed to display the Buyer Agent commission (the unilateral offer of compensation from the listing agent), and some/many listings may no longer even offer a buyer commission from the seller.
This is meant, in part, to force buyers to negotiate their buyer agent fee instead of thinking of it as "free, paid by the seller" (not entirely true, as it inflates the sales price, so buyer in effect is financing their buyer commission through a higher sales price and loan). Since it will now be more clear to them that this is their fee to pay, not automatically paid by the seller.
It is thought that this, in turn, will reduce buyer agent fees and also cause many buyers to simple go straight to the listing agent and do the deal unrepresented.
I had heard that commissions are a lot lower in Australia, so I was curious what it looks like there as we may eventually me moving closer to how you do it. Auctions are not comon here except in very high end, or distresses sales. So almost everything that doesn't trade by word of mouth pre-market, goes into a full marketing effort to draw offers from buyers.
Quite simlply, sourcing an appropiate property in an appropriate location, arranging inspections, negoatiating price and other terms on purchase, and arranging finance etc are all traditionally done by the buyer personally.
So buyer there do inspections before making the offer? Who pays for that?
So buyer there do inspections before making the offer? Who pays for that?
In NSW the seller generally organises and pays for a building inspection. The homes are usually open for inspection at least weekly. In Sydney it is generally expected that the home will be professionally styled, the higher the price the stronger the expectation. My daughter was selling her house for around $1.5million, which is a pretty average price for Sydney. They paid about $10,000 for all the improvements for its presentation. But got about $100,000 more at auction than their reserve price.
After people view the property at the open house, which is usually on a Saturday, they can pay to download the building inspection. They often request an additional inspection of the home and the selling agent takes them at a negotiated time.
At auctions there is a lot of negotiation around the reserve price, depending on the demand and interest. Agents are apt to under quote and even though it is illegal it still happens all the time.
I absolutely loathe auctions myself and that is not unusual. Too stressful, and decisions have to be made on the spot. I was glad we were in Morocco when my daughter’s auction took place. It was bad enough waiting while having breakfast, to hear what had happened!
Thanks everyone, this is all quite interesting. In the US a buyer typically:
- Get pre-approved for a mortgage. This determines price budget they they can afford.
- Engage a "Buyer Agent". There is no upfront or "out of pocket" cost for this, so most buyers have their own agent.
- View with agent prospective homes that are listed for sale in the MLS (Multiple Listing Servivce).
- Make an offer through Buyer agent and sign once terms are reached.
- Schedule inspections, and perform any other due diligence.
- Renegotiate following inspection. Then either terminate or move forward.
- Close 30-45 days after offer made.
In the US it's typical that the listing agent charges the seller 6% commission, then splits that with the Buyer's agent. so each agents eanrs 3%. Paid at closing. If the sale does not complete for some reason, neither agent gets paid, in most scenarios.
Our commission structure is being disrupted by lawsuits and a recent settlement brought by sellers who feel like forcing them to pay buyer commissions is unjust. Going forward, listings shown on the MLS will no longer be allowed to display the Buyer Agent commission (the unilateral offer of compensation from the listing agent), and some/many listings may no longer even offer a buyer commission from the seller.
This is meant, in part, to force buyers to negotiate their buyer agent fee instead of thinking of it as "free, paid by the seller" (not entirely true, as it inflates the sales price, so buyer in effect is financing their buyer commission through a higher sales price and loan). Since it will now be more clear to them that this is their fee to pay, not automatically paid by the seller.
It is thought that this, in turn, will reduce buyer agent fees and also cause many buyers to simple go straight to the listing agent and do the deal unrepresented.
I had heard that commissions are a lot lower in Australia, so I was curious what it looks like there as we may eventually me moving closer to how you do it. Auctions are not comon here except in very high end, or distresses sales. So almost everything that doesn't trade by word of mouth pre-market, goes into a full marketing effort to draw offers from buyers.
Its very similar, its just that everything the buyers agent does under this, is normally done by the buyer themselves.
The buyer also engages professional building inspectors and solicitors personally in order to see through the process, and has to pay them regarless of outcome (Unless you find an extremely nice one).
The selling agents Commisions depend on the state in which the property is located , in QLD its between 1 or 4.5%, with an average of 2.5%
One would be quite silly to do that though. Seems to happen a bit in smaller towns though.
But why? Simplest thing ever to do it without real estate involvement. We did it. Help can be obtained if so required. We done it back in 2000. Direct contact with vendor , at least in this case, seemed to simplify the matter over previous dealings with agents.
We done own inspection and all issues raised were remedied prior to reaching an agreement. Obviously prices were far lower back then, being a couple of years before real estate mayhem in pricing become more a norm.
Last edited by the troubadour; 03-18-2024 at 05:06 PM..
Even after their cut, I don't think you come out behind using one. Most sellers lack negotiation skills, are too emotionally invested, don't know how to market or sell a house and will struggle to generate the sort of interest required to get a competitive bid. The number of tyre kickers you'd have to deal with selling yourself would be awful. Nothing wrong with what Dan did "friend of friend" etc, but dealing with absolute strangers who are also complete idiots, no thanks.
Look at how unsuccessful Purple Bricks has been. Everyone hates RE agents (sorry OP) but a good one will get the job done and at least justify their fee, imo.
Even after their cut, I don't think you come out behind using one. Most sellers lack negotiation skills, are too emotionally invested, don't know how to market or sell a house and will struggle to generate the sort of interest required to get a competitive bid. The number of tyre kickers you'd have to deal with selling yourself would be awful. Nothing wrong with what Dan did "friend of friend" etc, but dealing with absolute strangers who are also complete idiots, no thanks.
Look at how unsuccessful Purple Bricks has been. Everyone hates RE agents (sorry OP) but a good one will get the job done and at least justify their fee, imo.
Agree, no way our daughter could have done what her agent did. They had a renovated three-bedroom, one bathroom house which needed to be made to look bigger. The agent sent in teams of people to organise the styling. They actually purchased potted plants as it was cheaper than renting and which went with them to their new house. How are you going to market a house yourself these days? Even though we still have a local newspaper most advertising is online and through agent data bases.
They were happy to get $100k over their reserve and above all happy to sell at auction. Otherwise they would have had to get bridging finance as they had already bought.
And actually they like the RE agent and would happily recommend him.
How are you going to market a house yourself these days? Even though we still have a local newspaper most advertising is online and through agent data bases.
The online portals, afaik, charge independent sellers a lot more to place an ad than they do an agency. You'd find a buyer eventually, but what an agent does that most people can't do is close the sale.
The best agent in this area doesn't do the whole professional styling thing, in fact people I know who have used her describe her as being in the house at 7pm on a Friday night the day before an open house vacuuming rugs etc.
The online portals, afaik, charge independent sellers a lot more to place an ad than they do an agency. You'd find a buyer eventually, but what an agent does that most people can't do is close the sale.
The best agent in this area doesn't do the whole professional styling thing, in fact people I know who have used her describe her as being in the house at 7pm on a Friday night the day before an open house vacuuming rugs etc.
Yes, the competition in your area for properties is intense, so probably not as necessary.
We got a budget type styling done for an IP house in outer Brisbane for only about $2,000 and it came up really well. We thought it well worth it.
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