American and Australian agents – very different structure
February 23rd, 2013 by Geoff Baldwin
We often hear comparisons being made between how business is done by agents in the US and Canada compared to in Australia however the differences are is substantial, according to RE/MAX WA Managing Director, Geoff Baldwin.
“I was recently involved in a social media exchange around whether agents should or should not conjunct, in which a US based agent commented that it was the norm over there so why wouldn’t we welcome it here in Australia?”, Mr Baldwin said.
“This US agent’s comments really do highlight the differences in the way we operate.
“Firstly, the average commission charged in the USA is more than double that charged here In Australia and hence the sharing of commission is not only more sustainable but is normal practice.
“While agents in Australia market to the public and conduct open homes for the public a US agent’s main thrust is towards other agents and attracting them to see the home in the hope that they will have a buyer.
“The Multi Listing system thrives in North America however, due to the comparatively lower level of commissions charged in Australia the MLS system here became unsustainable and ceased back in the early 1990’s.
“In Australia an agent/principal runs a business whereby his income is made from commissions earned as a result of his or her team making sales while in the US and Canada the main focus of an office owner is to make an income from charging a desk fee to as many reps as possible.
“As a regular visitor to the North America I am familiar with real estate companies that employ 200 or more salespeople charging each of them around $1,000 a month plus 5% or 10% of the commissions each agent earns while back home, if the salespeople don’t make sales then the principal also makes nothing.
“Many would say the existence of this common motivation in a team to get properties listed and sold is a very healthy one.
The population of North America is around 300 million while ours is 22 million hence the dynamics of how we are able to and how we choose to do business will always be significantly different and it would be a mistake for any agent to try to duplicate exactly the approach of a US agent”, Mr Baldwin said.
Media Contact – Geoff Baldwin