Real Estate Agents Fee Highway robbery

[raro]

When we bought our house a couple of years ago, we spent a couple of weekends driving around and looking at houses that had a for sale sign stuck to their front porch.

Then we thought it's a good idea calling up some real estate agent, maybe he knows of houses that we haven't seen yet, maybe some sellers don't want to have the for sale sign at the door, whatever, worth a try.

The agent showed us a lot of houses we saw already. well, he said now we're going to village so and so, a veeeerrrryyyy nice house, blabla, and I said, oh that's Bob's house, isn't it? Frustrated look, next house, same thing mm... We eventually saw some houses that I wouldn't consider to live in if get paid for it.

The house we eventually bought he never heard of.

Moral of the story? We got a 5% discount by the seller who had the agent fee factored in.

[sirineou]

It is what it has to be, in a particular market, so that the endeavor would be profitable enough so that individuals would want to engage in to it.

If it was too much, enterprising individuals would soon discover that there was a lot of money to be made by undercutting the competition, they would corner the market by charging less, and soon the rest of the market would have to adjust their fees to remain competitive or risk going out of business.

A Realtor usually works for a franchise, and has a commission split with them, something like 60/40 or 70/30 split ,this of course is negotiable and varies from franchise to franchise, as it is what the agent contributes in the transaction as opposed to what the franchise contributes. In some franchises the agent pays very little but gets a lower split, in others the agent pays a lot but gets a higher split.

If I was to chose an agent I would chose one from a franchise where the agent contributes more and get's a higher split, because it makes for a more motivated agent.

A listing rarely sells by the listing office, because if let's say each office had an average of ten buyers at a particular time , it would be hard for the listing office with it's ten buyers to compete with the hundreds of available buyers from all the other franchises.

So the listing agent has to share the commission not only with the selling agent but also with the office he/she works for, as such a 5% commission is very reasonable.

A lower commission could be negotiated, but such move would be IMO detrimental to the seller and end up costing more than it saves for the following reasons

Agent are more inclined to show listings that are more profitable, they get so many buyers per year and would not want to "burn" these buyers on unprofitable listings.

So listings with low commission rates tend to take longer to sell.

In this longer selling time one does not have the funds that would result from the sale available to him/her and experiences what it is called "opportunity costs" , in essence the funds are locked up in a property that is not selling, as opposed to being invested in other endeavors.

If a listing does not sell for a length of time, it becomes what is called in the industry a stale listing, agents are inclined to show stale listings less, as they don't like to waste their time , with listings that are either overpriced or have other shortcomings, and sellers might become more inclined to accept a lower offer than they might have accepted earlier in the process,this lower offer might be well in excess than the higher commission they

might have paid earlier.

So a lower commission might in the end , end up costing more

Any way this is my opinion in the matter

[Oink]

it would seem you are no longer in the uk toto.

perhaps it is time you get used to that

Yep i am used to living here, I would love to here from a farang real estate Dick Turpin. to hear what story they have to justify the ridiculous fees they charge

Im sure they will come up with some excuse.

They need to earn the same % commission as when they used to sell timeshare.

[guzzi850m2]

We did exact the same thing as Raro and also bought direct from the developer.

I only had 50% of the money needed but we made up a contract with them where I paid 100k per month until done and it was interest free.

Then 4 years later we found out we wanted a bigger garden/house so I put it up at 2 real estate agents (carefully chosen), one was good and one was <deleted>.

We got one offer at 4 mill (we paid 4.2) via one of the agents but I declined.

We ended up making a deal with the developer again, they bought back my house for 4.4 and I bought a bigger (show house) in the same village and again some of the money was paid off interest free.

The real estate agents didn't earn 1 cent from me.

Actually I felt a bit sorry for one of the agents as he seemed like a competent agent and he came to my house and took pictures and we discussed the price that would benefit me and sell the house but he came too late into it and I called him and told I do the deal myself. He was also willing to go down to a 4% fee. He is located on Naklua road fairly near my village.

The first real agent dude is a very high profile agent in Pattaya located on Jomtien beach and he was crap.

He wont win any awards from me for sure and I will never use him again if one is ever needed again.

[fosseway]

I am a retired UK property developer, and as such have dealt with many English Estate Agents over the years, the average current property price in the UK is estimated to be £265K. see link. http://www.theguardian.com/money/2014/aug/19/uk-house-prices-record-high

If one takes this figure for example, the 1% mentioned in a previous post here would result in a fee of £2,650, + about Baht 135K. Having just sold a Semi detached 3 bed house in Somerset, for £325K, I can confirm the

agents fee was actually 1%, negotiated down from 1.25%.

If one was selling a more expensive property, lets say around £800K you should be able to negotiate the commission down to .75% with a downward sliding scale for multi Million Pound properties.

After saying this, their is a vast difference between Thai and English agents, for example the English agent has to follow a strict legal code of conduct, including any form of misrepresentation. The overheads would also be very different,

example office rent or purchase, sales staff wages etc.

I agree that normal commission charged here is 5%. lets look at commissions on a studio unit with a value of Baht 1.5 Million = Baht 75K, a one bed unit say Baht 2.5 Million = Baht 125K, a property with a sale price of Baht say Baht 15 Million

=750K !! That would be outrageous, they should apply some sort of sliding scale charging.

Adding to this, I find many of the agents here unprofessional, to say the least.

So in conclusion, I would say that they certainly overcharge.

[AsiaPropertyWorld]

We had our house and land with several agents. A few brought people to view. In the end the wife had some large tarpaulin signs made up and placed them by the road near the house. They generated more viewings and an eventual sale. We saved ourselves the 5% and the wife started to sell a few houses and land herself and just charging 2%.

Without an office she has managed to sell some land and houses.

It is a number game - the more people who see that your property is for sale the greater your chances are of selling it.

Putting up your own for sale sign is often a good move and so is using our free listing service http://asiapropertyworld.com/th because we do not charge commission or any type of fee.

Your wife is welcome to add her land and houses to our site and if she wants to promote a particular property she can upgrade it to be a Platinum Feature from only $30 for a three month period which is totally optional without any hard sell. We believe in a relaxed approach to real estate and we know that this is appreciated by the countless visitors and users of our web site.

Good luck with the business

[stoli]

1%?..Really? In the US the normal selling fee is 6%...3% for the listing agent + 3% for the buyer's agent...that can be the same person......

Yes, but in US realtors are schooled, tested and licensed. That said I have found the broker's fee here negotiable.

Being in Real Estate for 12 years in the states, I agree with both of the above statements 100% I am amazed that here, and in the U.K., anyone can call themself a real estate agent with zero training. Every file that I had in the U.S. was at least 3 inches deep with paperwork on disclosures, inspections, notary, title documents, and on & on. You were always on the verge of being sued, so you had to document everything here. You protected your clients as well by being knowledgeable in every transaction. Here, you just get a paper pusher that cannot even read the documents. What a shame.

[TheCruncher]

1%?..Really? In the US the normal selling fee is 6%...3% for the listing agent + 3% for the buyer's agent...that can be the same person......

Yes, but in US realtors are schooled, tested and licensed. That said I have found the broker's fee here negotiable.

Being in Real Estate for 12 years in the states, I agree with both of the above statements 100% I am amazed that here, and in the U.K., anyone can call themself a real estate agent with zero training. Every file that I had in the U.S. was at least 3 inches deep with paperwork on disclosures, inspections, notary, title documents, and on & on. You were always on the verge of being sued, so you had to document everything here. You protected your clients as well by being knowledgeable in every transaction. Here, you just get a paper pusher that cannot even read the documents. What a shame.

. What a shame.

You mean that in the US you're always on the verge of being sued, even when selling your own house.

Edited October 13, 2014 by petercool
edited colour text

[petercool]

Flame and baiting posts removed.

If you have stated your view and another has stated his view, then no need to argue about it.

[watcharacters]

1%?..Really? In the US the normal selling fee is 6%...3% for the listing agent + 3% for the buyer's agent...that can be the same person......

True, that's what agents would like but it is for sure negotiable. I saw some agents willing to accept as low as 3% total start to finish.

[lemel]

I understand people calling most of the real Esatate agent idiots, fools, lazy etc etc but if one of them finds you a buyer he must have done something right and if he is charging 3-4-5% then its up to you as an adult to either accept the offer or decline...you only pay them if they are succesful, you are not paying the idiots, lazy or foolish paper pushers anyway!

[AnotherOneAmerican]

The 5% asking price for agent's commission in Thailand is patently absurd, but it is only an asking price and is open to negotiation. Why is it so high? Simply because some people are stupid enough to pay it.

Generally agents in Thailand (especially the farang ones) are an untrained, unqualified, dishonest, incompetent bunch of layabouts who could never hold down a real job if their lives depended on it. I dare say that amongst the dross there are some decent ones, but I haven't met any of them.

As foreigners are prohibited from working in the Thai property market, by definition they must be dishonest.

[sirineou]

1%?..Really? In the US the normal selling fee is 6%...3% for the listing agent + 3% for the buyer's agent...that can be the same person......

True, that's what agents would like but it is for sure negotiable. I saw some agents willing to accept as low as 3% total start to finish.

I cant believe that in the UK they will take 1% . That means that in a 200,000 listing the commission would be 2,000

unless this is an in-house transaction, divide this between the listing and the selling office for 1.000 each, then divide this between the office and the agent, and you can have the agent with as little as 600. But even if the agent got 1,000 I dont see how such agent could properly market the property and show a profit ,

Even a 3% negotiated commission would not be to the sellers interest, because at the very least, it would have to be an in-house transaction, as no other office would bother getting involved for 1.5% commission,

In-house listings are at a severe disadvantage as they only get exposed to a much smaller pool of buyers.

[jdwilko]

I sold my house 5 years ago with a faring estate agent on second road. He sold my house for 3 million baht and told me the 5% agents fee would be paid for by the buyer . I never met the buyer until a year after he bought my house just by chance visiting an old neighbour , I was then shocked to find out he paid 3.5 million for my house . Next time I will use a Thai company , I have since seen the English estate agent driving around in a big new Mercedes. So I totally agree with your comment they are dishonest .

The 5% asking price for agent's commission in Thailand is patently absurd, but it is only an asking price and is open to negotiation. Why is it so high? Simply because some people are stupid enough to pay it.

Generally agents in Thailand (especially the farang ones) are an untrained, unqualified, dishonest, incompetent bunch of layabouts who could never hold down a real job if their lives depended on it. I dare say that amongst the dross there are some decent ones, but I haven't met any of them.

As foreigners are prohibited from working in the Thai property market, by definition they must be dishonest.

[TheCruncher]

I sold my house 5 years ago with a faring estate agent on second road. He sold my house for 3 million baht and told me the 5% agents fee would be paid for by the buyer . I never met the buyer until a year after he bought my house just by chance visiting an old neighbour , I was then shocked to find out he paid 3.5 million for my house . Next time I will use a Thai company , I have since seen the English estate agent driving around in a big new Mercedes. So I totally agree with your comment they are dishonest .

The 5% asking price for agent's commission in Thailand is patently absurd, but it is only an asking price and is open to negotiation. Why is it so high? Simply because some people are stupid enough to pay it.

Generally agents in Thailand (especially the farang ones) are an untrained, unqualified, dishonest, incompetent bunch of layabouts who could never hold down a real job if their lives depended on it. I dare say that amongst the dross there are some decent ones, but I haven't met any of them.

As foreigners are prohibited from working in the Thai property market, by definition they must be dishonest.

I sold last year my house in a Moobaan, and had it listed on classifieds sites and shopping malls, as I hate real estate agents with a vengeance.

I even had to hound a Thai agent out of my house who had entered under a false excuse.

On another occasion I get a call of a Thai agent who tells me he has a client and if he can earn a commission of 3%

My house was listed for 1.5M so I tell him he can get the 3% on that price if he comes WITH the client, and is not allowed to take pictures or list my house, to which he agrees.

At the time of the appointment he's waiting outside my place with a contract, while his partner is waiting with the client a few soi's down the Moobaan.

I tell him in clear words that he can put the contract where the sun doesn't shine and am ready to leave when he calls his partner to come over with the Thai client . In fact they have two clients.

All conversations happen in Thai of course and I don't pay attention, until when one of the clients has left. At that point I overhear that he is asking the client 1.650.000, so I get pretty mad and tell him in Thai it's time for his running exercises, to which he agrees after some short arguments.

I then talk with the left behind client, and it becomes clear that he not only upped the asking price with 150.000 and will get my 3% if sold, but the client has to pay another 3%.

Did I mention already that I hate real estate agents ?

Edited October 13, 2014 by TheCruncher

[fosseway]

1%?..Really? In the US the normal selling fee is 6%...3% for the listing agent + 3% for the buyer's agent...that can be the same person......

True, that's what agents would like but it is for sure negotiable. I saw some agents willing to accept as low as 3% total start to finish.

I cant believe that in the UK they will take 1% . That means that in a 200,000 listing the commission would be 2,000

unless this is an in-house transaction, divide this between the listing and the selling office for 1.000 each, then divide this between the office and the agent, and you can have the agent with as little as 600. But even if the agent got 1,000 I dont see how such agent could properly market the property and show a profit ,

Even a 3% negotiated commission would not be to the sellers interest, because at the very least, it would have to be an in-house transaction, as no other office would bother getting involved for 1.5% commission,

In-house listings are at a severe disadvantage as they only get exposed to a much smaller pool of buyers.

http://www.propertywire.com/news/europe/uk-estate-agent-fees-201201246041.html

[fosseway]

1%?..Really? In the US the normal selling fee is 6%...3% for the listing agent + 3% for the buyer's agent...that can be the same person......

True, that's what agents would like but it is for sure negotiable. I saw some agents willing to accept as low as 3% total start to finish.

I cant believe that in the UK they will take 1% . That means that in a 200,000 listing the commission would be 2,000

unless this is an in-house transaction, divide this between the listing and the selling office for 1.000 each, then divide this between the office and the agent, and you can have the agent with as little as 600. But even if the agent got 1,000 I dont see how such agent could properly market the property and show a profit ,

Even a 3% negotiated commission would not be to the sellers interest, because at the very least, it would have to be an in-house transaction, as no other office would bother getting involved for 1.5% commission,

In-house listings are at a severe disadvantage as they only get exposed to a much smaller pool of buyers.

[DD13]

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I sold my house 5 years ago with a faring estate agent on second road. He sold my house for 3 million baht and told me the 5% agents fee would be paid for by the buyer . I never met the buyer until a year after he bought my house just by chance visiting an old neighbour , I was then shocked to find out he paid 3.5 million for my house . Next time I will use a Thai company , I have since seen the English estate agent driving around in a big new Mercedes. So I totally agree with your comment they are dishonest .

The 5% asking price for agent's commission in Thailand is patently absurd, but it is only an asking price and is open to negotiation. Why is it so high? Simply because some people are stupid enough to pay it.

Generally agents in Thailand (especially the farang ones) are an untrained, unqualified, dishonest, incompetent bunch of layabouts who could never hold down a real job if their lives depended on it. I dare say that amongst the dross there are some decent ones, but I haven't met any of them.

As foreigners are prohibited from working in the Thai property market, by definition they must be dishonest.

I sold last year my house in a Moobaan, and had it listed on classifieds sites and shopping malls, as I hate real estate agents with a vengeance.

I even had to hound a Thai agent out of my house who had entered under a false excuse.

On another occasion I get a call of a Thai agent who tells me he has a client and if he can earn a commission of 3%

My house was listed for 1.5M so I tell him he can get the 3% on that price if he comes WITH the client, and is not allowed to take pictures or list my house, to which he agrees.

At the time of the appointment he's waiting outside my place with a contract, while his partner is waiting with the client a few soi's down the Moobaan.

I tell him in clear words that he can put the contract where the sun doesn't shine and am ready to leave when he calls his partner to come over with the Thai client . In fact they have two clients.

All conversations happen in Thai of course and I don't pay attention, until when one of the clients has left. At that point I overhear that he is asking the client 1.650.000, so I get pretty mad and tell him in Thai it's time for his running exercises, to which he agrees after some short arguments.

I then talk with the left behind client, and it becomes clear that he not only upped the asking price with 150.000 and will get my 3% if sold, but the client has to pay another 3%.

Did I mention already that I hate real estate agents ?

As I said earlier........."Chancers"........whichever nationality

Oh....and I was in the property business for decades in the UK........my top limit to pay the agents was 1.5%....(I usually paid1%)

And to the guy above who "cannot believe" that agents will do all their work.....and still accept that percentage.......

They certainly do in the UK......

[KittenKong]

I cant believe that in the UK they will take 1% .

It is the truth.

[KittenKong]

I sold my house 5 years ago with a faring estate agent on second road. He sold my house for 3 million baht and told me the 5% agents fee would be paid for by the buyer . I never met the buyer until a year after he bought my house just by chance visiting an old neighbour , I was then shocked to find out he paid 3.5 million for my house .

This is more common here than you can possibly imagine.

[KittenKong]

As foreigners are prohibited from working in the Thai property market, by definition they must be dishonest.

If they were not allowed to do it then I think there would have been clamp-downs for work permits by now. As far as I can see selling property is one of the few things that a totally untrained, unqualified and incompetent farang can get a work permit for here, which probably explains why so many do it.

[DD13]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

As foreigners are prohibited from working in the Thai property market, by definition they must be dishonest.

If they were not allowed to do it then I think there would have been clamp-downs for work permits by now. As far as I can see selling property is one of the few things that a totally untrained, unqualified and incompetent farang can get a work permit for here, which probably explains why so many do it.

And why so many........ "fail"........

If they knew their subject..... they would pour scorn on the theory here among agents .... that people are better off buying "new"....rather than buying "existing properties"....

which "will" have had the majority (if not "all") of the teething problems..... which always occur...... remedied / rectified....along with the expense of landscaping etc.

That is what experience and training is all about.....

Edited October 13, 2014 by DD13

[sirineou]

I cant believe that in the UK they will take 1% .

It is the truth.

I don't doubt the truthfulness of the statement, I just find it difficult to believe that this can be financially viable in all Real estate listings.

Perhaps in listings over a certain amount, where 1% would be sufficient to cover expenses and provide a return.

Or is it possible that real estate is so expensive in the UK where a 1% commission is adequate?

[KittenKong]

I don't doubt the truthfulness of the statement, I just find it difficult to believe that this can be financially viable in all Real estate listings.

Perhaps in listings over a certain amount, where 1% would be sufficient to cover expenses and provide a return.

Or is it possible that real estate is so expensive in the UK where a 1% commission is adequate?

Prices are certainly quite high in the UK, depending on the area. But there are many areas in the UK where terraced houses (townhouses) go for between 3MB-4MB (equiv.) and the fees for these are still the same 1%, or 30-40KB (equiv.). So that would compare well with a medium sized condo or townhouse in Jomtien, yet here the agents would be wanting anything up to 200KB for the same sale.

I think the main difference in the UK is that there agents actually sell properties every day rather than just having thousands of listings but rarely, if ever, making a sale. And vendors in the UK generally want to sell their properties when they put them up for sale, and aren't just testing the water.

Many agents in the UK would expect to sell a decent property at a sensible price within a month of listing it, if not within days or even hours.

[ThaiBob]

The 5% asking price for agent's commission in Thailand is patently absurd, but it is only an asking price and is open to negotiation. Why is it so high? Simply because some people are stupid enough to pay it.

Generally agents in Thailand (especially the farang ones) are an untrained, unqualified, dishonest, incompetent bunch of layabouts who could never hold down a real job if their lives depended on it. I dare say that amongst the dross there are some decent ones, but I haven't met any of them.

As foreigners are prohibited from working in the Thai property market, by definition they must be dishonest.

Really? I thought foreigners could work in real estate here using something called a work permit.

[AnotherOneAmerican]

As foreigners are prohibited from working in the Thai property market, by definition they must be dishonest.

If they were not allowed to do it then I think there would have been clamp-downs for work permits by now. As far as I can see selling property is one of the few things that a totally untrained, unqualified and incompetent farang can get a work permit for here, which probably explains why so many do it.

Foreigners can't get WPs to deal in real estate.

They can get a WP as 'office managers' then work illegally selling real estate, and hope nobody that reads Thai ever asks to look at their WP and reports them.

This, of course, falls in the 'dishonest' category.

[ThaiBob]

As foreigners are prohibited from working in the Thai property market, by definition they must be dishonest.

If they were not allowed to do it then I think there would have been clamp-downs for work permits by now. As far as I can see selling property is one of the few things that a totally untrained, unqualified and incompetent farang can get a work permit for here, which probably explains why so many do it.

Foreigners can't get WPs to deal in real estate.

They can get a WP as 'office managers' then work illegally selling real estate, and hope nobody that reads Thai ever asks to look at their WP and reports them.

This, of course, falls in the 'dishonest' category.

I just learned something, basically you are saying all those young farangs I see sitting in Alan Bolton's office and the real estate offices all over Pattaya do not have work permits. I would think they could qualify because they have English, Russian, German language skills (amongst others ) that are not possessed by a Thai.

[advancebooking]

Most of us know "roughly" what our properties are worth and the net figure we would like to achieve

So tell the agent to put their fees and taxes "on top".......whatever percentage they want......they can have 10% if they want to put the effort in.....

They may not like it.....but "hey" they are working for you.......not the other way round....

We all know that the majority of agents world-wide are frowned upon..."Chancers"... who couldn't get a real job even if they tried to.....and it's no different here ....worse if anything.....

I am inclined to agree that a panoramic sign on your wall probably works just as well........

probably only cost a couple of thousand Baht....

thats a daft idea. Your property will never sell. Buyers will always compare the price of your place to others on the market

[i claudius]

I cant believe that in the UK they will take 1% .

It is the truth.

Never ever knew an agent that would take 1%

[i claudius]

I love reading all the people who whinge "estate agents make a fortune but do nothing" well if they sell your house why complain ,never hear people complaining that if they advertize it ,bring people around and dont sell it ,they get nothing . so many agents have opened offices and charged for a listing ,but no fee if they sell the house ,all went broke because the sellers didnt want to pay a small fee upfront ,as i always say dont complain ,if your so good SELL IT YOURSELF.it