On average, for every hour that a real estate agent spends with the homeowner of the property they are selling, they will spend around nine hours out of eyesight working on the seller’s behalf. The reason for this is fairly simple – if they don’t sell the property, they don’t get paid.
“Most agents work on a commission basis, meaning that they will only receive payment for their services if the property is sold. Unlike other professionals who bill their clients for the amount of time they spend working for them, agents run the risk of coming away empty-handed. While this is a risk, it is also highly motivating and pushes them to go the extra mile to ensure that the deal is closed,” explains Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
The reason that certain agents charge more, while others charge less has to do with the agent’s experience and what they can offer the seller. “If an agent can achieve the agreed-upon selling price within the stipulated time frame, they are often able to charge higher rates for the higher quality service they are able to provide,” Goslett explains.
As part of their service to the seller, an agent will take out magazine and newspaper adverts, print flyers and brochures, have professional photos taken of the home, and ensure that the home enjoys premium placement on property search portals. Not to mention using the services of a public relations officer to engage with targeted media, posting listings on social media, and holding show days.
Beyond this, an agent earns their commission through the power of their networking skills and their ability to match buyers with the right homes. To match buyers to homes, agents often spend time helping other agents in their network to match the right buyer with the right home. Often agents will refer buyers to other agents if they know that agent has the house that checks every box on their wish list, which makes partnering with an agent from a large real estate brand more beneficial to sellers.
Once a buyer and home have been suited, much of the job entails dealing with the offer from the buyer, as well as counteroffers from the seller. According to Goslett, this is a crucial part of the property sale, as the agent can net the seller thousands during this stage of negotiations.
Sellers also pay their real estate professionals for their unique ability to determine and secure the full value of the home. To accurately price a home, an agent will need to complete a comparative market analysis (CMA) that considers the average price per square metre in the area, recent sale prices of similar homes, and comparative prices of other properties that are still on the market. An agent spends lots of time researching property sales prices and data to ensure that they know their area well and have a good handle on the market.
Unfortunately, not every property sale will go smoothly. Agents also earn their commission by shielding their clients from any unnecessary drama. “An agent will work tirelessly to ensure that the property sales process is as hassle-free as possible for all parties involved. Even if there are no hiccups, a property transaction can be stressful, and people often get emotional. A good agent keeps a positive approach and comes up with a constructive solutions to issues to protect buyers and sellers from the stress this might cause,” Goslett explains.
Ultimately, if a seller does not feel like their agent has earned the commission, then perhaps they are dealing with the wrong agent. “A good agent will add value to property transaction and earn their keep. The amount of hours spent to market one particular listing is irrelevant, as it often does not reflect the countless number of hours the agent has spent behind the scenes building up their network of buyers and their knowledge of the area – both of which enables them to sell a home as quickly as possible,” Goslett concludes.