Are mainstream real estate agencies being a bit greedy?

Dawn of a new eraThe REAA questions standard industry commission fees.

Earlier this week, the REAA’s Residential Advisory Group met in Wellington for its six monthly industry review.

The agenda for these meetings is to tackle major issues faced by the industry, with a view to making the business of buying and selling real estate more fair and equitable for all parties involved (including agents and agencies.)

As a member of the panel, I always enjoy being part of these meetings… however it was with particular excitement that I left the latest gathering.

Why? Well, because – for the first time – the REAA raised an issue that I see as being crucial to creating a better experience for sellers… Specifically, the organisation’s representative asked why real estate commission fees have remained unchanged in Auckland when the average local sale price has increased significantly in the past 5 years and overheads have stayed roughly the same.

To put it another way – are traditional agency fees a bit greedy these days, given that the percentages are delivering a much higher lump sum commission?

I’ve recently blogged about the fact that Auckland home owners are paying roughly double was their counterparts in Sydney do to sell a home… I think that’s outrageous and it seems that our governing body is starting to think the same way.

While they can’t dictate fees, the REAA can start to guide consumers on how to get a fair deal and I don’t think it will be long before they start to do exactly that. And that, my friends, will mark the start of a new era in real estate… Watch this space!

If you’re interested in more articles challenging the traditional approach to real estate (and commission fees), check out my blog.

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