As you already know, I always focus on cooperation, either when it comes to other real estate agencies, investors, or anyone who can potentially become interested in our offer. Unfortunately, the market is not exactly a place where all brokerage offices happily exchange offers with each other.
When hiring an agent, make sure that they are working with other local agents and are not shutting down your sales. Why? Because when a real estate transaction is not finalised within an estimated time frame, frustration and many questions arise. It is after such situations that we: exclusively employed agents hear from clients:
“Exclusivity means limitation, why should I stick only to one option when there are so many companies on the market”
“After signing the contract, the agent disappeared, there was no contact with him at all.”
“There was no sign of any action taken.”
Perhaps all of those cases could happen, but you should ask yourself what made them hire an agent who failed their expectations. The reasons may be various, but I will here describe the two most popular ones in my opinion:
Proposal of attractive salary – you were tempted to sign a contract with an agent who offered you the best financial terms for you, meaning the lowest commission? I have to worry you, but in this way, you closed your own way to the cooperation of this broker with other real estate offices and the chance that your offer will be promoted appropriately and wellpositioned on the web.
Why? Here we go with a simple example:
- Value of your property: PLN 500,000
- Remuneration negotiated by the agent: 1%, which gives PLN 5,000 of remuneration
Unfortunately, I have to inform you that working for such an amount is unprofitable for agents. Especially if he works in someone’s office. The average rate on the office / agent split market is 50% / 50%, sometimes 40% / 60%. Since you pay the agent PLN 5,000 and he gives half of it to the office, he receives PLN 2,500. Let’s not forget that according to commercial law, this is an income. Hence this amount should be reduced by the income tax (19%), which ultimately means that upon a successful sale the agent earns the amount of PLN 2,025.
Now consider whether you would invest in:
- a photographer specialising in real estate (several hundred to one thousand PLN),
- advertising campaign in social media (several dozen – several hundred PLN),
- positioning of the offer on portals (several hundred PLN)
- virtual walk (several hundred PLN and more depending on the m2)
The answer is simple, and it is “no”. Because it simply doesn’t pay off.
What’s next? To turn the entire sale to be profitable for the agent, he is forced to collect
remuneration from the other party lying between 1.5% to even 3%. You think that it is none of your business because you are not paying for it. And here, unfortunately, I have to get you back on tracks. You pay, and it’s dear. The agent closes the offer for other offices. Imagine that I reach such an office and inform them that the buyer who covers my salary is interested in this offer. How do you think the agent will react? I know this reaction very well:
“I am not cooperating with this offer”
“You know what, this offer is rather gone.”
“I have a lot of clients for this apartment”
“I do not cooperate”
Such answers result from the fact that you are not paying your agent enough, and because my client covers my salary, it is not profitable for your broker to cooperate for PLN 2,000.
- Your listing will be on one page with other properties with “professional photos” without much marketing or positioning
- The agent does not represent your interests, but only mediates between the parties, he only cares about completing the transaction.
- Simply imagine the involvement of your agent with such earnings.
Reputation and “customer base.”
Are you convinced by an agent working in a large company with a broad customer base who are ready to buy your apartment?
I would be careful. Knowing from experience that the customer base is often a pipe dream that is used to obtain a real estate trade offer to handle. Ultimately, this has nothing to do with the sales process and collaboration with other brokerage firms afterwards. I had the opportunity to work in an international company as well as in a local real estate office, and I believe that at the end every company is made up of people, so not necessarily a small local agency may be worse in operation than an international giant. However, be aware that it cuts both ways.
That is why Ii is worth here to mention the MLS system, through which estate offices do not compete, but cooperate, thanks to which we, as agents can serve our clients faster and better. Recently, I closed the real estate deal without any published advertising, for the price we agreed with the sellers. Effect? Mutual satisfaction. My clients did not have to wait long for
the property to be sold, and the buying client’s agent proposed them an offer that is not on the market and only they could see it first – the perfect deal!
Hiding an offer from other agents for the sake of your own benefit is nothing more than slowing the development of the market, but above all, acting to the detriment of the client.
Remember: Every valued real estate agent receives adequate remuneration for what they do, and in return, you can count on:
- Commitment first
- Professional advisory
- Collaboration with other real estate agencies
- Appropriate preparation of the offer, fit for purpose marketing and sales strategy
- Communication and reporting on the progress of the work done
- Creativity in sales
- Unconventional forms of promotion: open days, advertising campaigns in social media
- Provision of home staging, virtual walks.
What’s the golden mean? Before you decide to cooperate with any office, find out what options you have, meet with several agents. By doing this, you will see what they can offer you.
Ah, and don’t forget to call me!