Agent fees a moral challenge
May 20th, 2013 by Geoff Baldwin
The variation in fees agents charge their clients to sell their properties has become a topical discussion as the industry strives to lift its public image according to Geoff Baldwin, Regional Owner of RE/MAX Western Australia.
“Lawyers, doctors, accountants and other professions tend to have a set scale of fees that they apply across the board however real estate agents are more often discriminating with their fees and charging different fees to different clients for selling similar properties”, Mr Baldwin said.
“An example of fee discrimination is when one client accepts an agent’s selling fee of say 3% but then another client selling a similar property negotiates the same agent down to say 2% or less, a difference on a $500,000 property of $5,000.
“This is not about how much a particular agent charges as there are many different business models in the market from low fees and basic service to higher fees for full service by agents with higher levels of experience, skills and resources.
“To charge a client one fee because they just accept it without argument but to then discount that fee for a second client who is a tougher negotiator, I consider being discriminatory and bordering on unfair practice.
“The thinking is that, if there is to be a discount then the first buyer deserves it as much as the second and an agent’s fee scale should apply fairly and equally for all clients rather than based on the clients acceptance or resistance.
“The simple test is, if the two clients met and one discovered they had been charged significantly more, would they feel as though they had been treated fairly and ethically?
“There are of course exceptions where an agent is selling multiple properties for a developer but I am referring to single listings in similar suburbs or areas where the sales requirements and criteria are pretty much the same.
“Obviously this is a controversial topic and people may have differing opinions however I encourage agents to ask themselves, if they are varying their fee from client to client, would they be comfortable if all of their clients became aware of how they operated”, Mr Baldwin said.
Author – Geoff Baldwin – 0413754414