Commission real estate agent

[janclaes47]

What is the going rate of the commission on the sale of a +10 million property.

 

I'm not interested in what one want to offer, or how I can sell it myself, but what the going rate is and what the real estate agents accept.

[JHolmesJr]

Id offer 1%

[KarenBravo]

Historically, it used to be 3%, but, now they've got greedy and want 5%.

[juehoe]

Historically, it used to be 3%, but, now they've got greedy and want 5%.

5% for a house, 3% for land

[janclaes47]

2 minutes ago, KarenBravo said:

Historically, it used to be 3%, but, now they've got greedy and want 5%.

 

I've been asked 3%, but given the value of the property, this is still quite a sum of money of course. So was actually thinking if something like 2% is an acceptable suggestion.

 

So far the no documents have been signed, but the agent came with a buyer who seems really interested, without me having it listed anywhere.

 

The thing is that the buyer of course want to bargain on the list price, and that would limit me, if i reduce the price with 500K and the commission only get reduced by 15.000.

 

 

[KarenBravo]

Just now, juehoe said:

 

5% for a house, 3% for land

 

Here in Phuket, it used to be 3% for a house.........now, it's 5%.

[trogers]

21 minutes ago, janclaes47 said:

 

I've been asked 3%, but given the value of the property, this is still quite a sum of money of course. So was actually thinking if something like 2% is an acceptable suggestion.

 

So far the no documents have been signed, but the agent came with a buyer who seems really interested, without me having it listed anywhere.

 

The thing is that the buyer of course want to bargain on the list price, and that would limit me, if i reduce the price with 500K and the commission only get reduced by 15.000.

 

 

I would tell the agent a discount of Bt500k to the buyer to close the deal, Bt100k from his 3% commission and Bt400k from you, both calculated from your original price.

[Peterw42]

OP, Agents dont just sell here , they act as agent for a buyer as well and add a margin to the asking price. Something you may wish to consider given that you didnt have the property listed and the agent found you.

There are some weird and wonderful deals that go on here, there is sometimes a difference between what you accept and what the agent is selling it for, a bit extra for the agent on top of the commission.  The key word being "accept". Its not considered illegal or even unethical by the agents as they are getting you the price you accepted and the buyer is happy with what they are paying.

 

My wife sells realestate and I have seen agent represent a buyer to her, they agree on a price, she sells the property for her seller, gets her commission etc, but the (buyers) agent is adding 100k to the selling price. I have seen my wife return from the land office with a bank cheque for the seller and no idea what the buyer paid. 

 

As lawyers are not always involved and the agents do the land office dealings, its an easy exercise for them.

[janclaes47]

4 hours ago, Peterw42 said:

OP, Agents dont just sell here , they act as agent for a buyer as well and add a margin to the asking price. Something you may wish to consider given that you didnt have the property listed and the agent found you.

There are some weird and wonderful deals that go on here, there is sometimes a difference between what you accept and what the agent is selling it for, a bit extra for the agent on top of the commission.  The key word being "accept". Its not considered illegal or even unethical by the agents as they are getting you the price you accepted and the buyer is happy with what they are paying.

 

My wife sells realestate and I have seen agent represent a buyer to her, they agree on a price, she sells the property for her seller, gets her commission etc, but the (buyers) agent is adding 100k to the selling price. I have seen my wife return from the land office with a bank cheque for the seller and no idea what the buyer paid. 

 

As lawyers are not always involved and the agents do the land office dealings, its an easy exercise for them.

 

In my case the price the buyer pays is the price I asked, as I have seen the listing with the price on the agents website, and have personally verified with the interested buyer.

[Mysterion]

Getting sales listings is usually the hardest and most rewarding part of a real estate agents business.

 

You can likely do an exclusive sales deal for 2%.

 

Or, you can find an agency to do non-exclusive sale for 4%.

 

If you know the agent worked hard to sell your house, they deserve their full commission.

 

If the agent didn't work so hard, you can squeeze them to reduce their commission during co-broker sales price negotiations.

Edited June 10, 2017 by Mysterion

[KittenKong]

It's a mystery to me why agents here think they deserve commission at all, especially as many of them cheat and steal by adding extra amounts onto the purchase price as described.

 

For the minimal effort they put into anything they deserve a small flat fee, no more.

 

[smutcakes]

8 hours ago, KittenKong said:

It's a mystery to me why agents here think they deserve commission at all, especially as many of them cheat and steal by adding extra amounts onto the purchase price as described.

 

For the minimal effort they put into anything they deserve a small flat fee, no more.

 

Maybe your character draws you to lazy <deleted> agents as all you do is whine. I know a number of agents in Pattaya, Thai mostly who work their asses off, 7 days a week in the hope of making just one sale. 

 

As an example selling a 1 million baht condo in Pattaya. A 3% fee would be the equivalent of 30,000 baht. How many times do they have to run around after time wasters, people who decide not to take it, dealing with question after question, handling in most cases for long after completion issues of the new owner (setting up UBC etc etc) They might show an apartment 20-30 times before getting a hit. How much time and petrol does that take. All for a 30,000 baht fee, SHOULD they manage to sell it.

 

 

[janclaes47]

1 hour ago, smutcakes said:

Maybe your character draws you to lazy <deleted> agents as all you do is whine. I know a number of agents in Pattaya, Thai mostly who work their asses off, 7 days a week in the hope of making just one sale. 

 

As an example selling a 1 million baht condo in Pattaya. A 3% fee would be the equivalent of 30,000 baht. How many times do they have to run around after time wasters, people who decide not to take it, dealing with question after question, handling in most cases for long after completion issues of the new owner (setting up UBC etc etc) They might show an apartment 20-30 times before getting a hit. How much time and petrol does that take. All for a 30,000 baht fee, SHOULD they manage to sell it.

 

 

 

But it is a completely different story on a +10 million Baht property of course.

[KittenKong]

2 hours ago, smutcakes said:

Maybe your character draws you to lazy <deleted> agents as all you do is whine. I know a number of agents in Pattaya, Thai mostly who work their asses off, 7 days a week in the hope of making just one sale. 

 

As an example selling a 1 million baht condo in Pattaya. A 3% fee would be the equivalent of 30,000 baht. How many times do they have to run around after time wasters, people who decide not to take it, dealing with question after question, handling in most cases for long after completion issues of the new owner (setting up UBC etc etc) They might show an apartment 20-30 times before getting a hit. How much time and petrol does that take. All for a 30,000 baht fee, SHOULD they manage to sell it.

 

If property was sensibly priced here it would sell quickly to an early viewer. This is why agents in the UK manage perfectly well on 1 or 2%.

 

The only reason that property hangs around forever here is because prices are much too high and quality is often low, and one of the main reasons that prices are much too high is because agents bump the prices up either in order to cream off the top or to have some extra margin for negotiation, or some other devious reason.

Just another example of bad Thai economics as far as I'm concerned.

[KarenBravo]

There's an agent here in Phuket who charges 3% from the buyer and nothing from the seller.

[tropo]

 
If property was sensibly priced here it would sell quickly to an early viewer. This is why agents in the UK manage perfectly well on 1 or 2%.
 

.

If a property sells too quickly it is NOT priced sensibly - It's priced too low. You'll be forever kicking yourself for not asking more. It's better to slow it down and try for more unless of course you're desperately in need of money.



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[swissie]

2 hours ago, KittenKong said:

 

If property was sensibly priced here it would sell quickly to an early viewer. This is why agents in the UK manage perfectly well on 1 or 2%.

 

The only reason that property hangs around forever here is because prices are much too high and quality is often low, and one of the main reasons that prices are much too high is because agents bump the prices up either in order to cream off the top or to have some extra margin for negotiation, or some other devious reason.

Just another example of bad Thai economics as far as I'm concerned.

Thanks, we needed that. Above comment describes nicely how R/E Agents operate.
Not too far away from some Jet-Ski-Scam, me thinks.
Cheers.

[KittenKong]

1 hour ago, tropo said:

If a property sells too quickly it is NOT priced sensibly - It's priced too low.

 

That's debatable. But either way I wrote "quickly" not "too quickly", and by quickly I meant promptly or without undue delay.

 

For standard properties a few weeks is considered reasonable in the UK and anything that has not sold in that time would generally be considered to be overpriced or badly marketed or in some way undesirable. Obviously very unusual properties (windmills, towers, caves etc) might take much longer to sell even if the price is fair. But here most condos and houses are fairly normal, at least in the larger towns.

 

Here a few years is common and many years is not exceptional.

 

 

1 hour ago, tropo said:

You'll be forever kicking yourself for not asking more. It's better to slow it down and try for more unless of course you're desperately in need of money.

 

That's the mentality of a country where most property is not the domicile of the owner. In countries where most property is the domicile of the owner, the owner will normally be keen to get a reasonably prompt sale at a sensible price in order to buy another property to live in, and he can be fairly sure that wherever he is moving to will also be reasonably priced for the same reasons. It's not desperation but simple maths. Even those selling rental properties or second homes would generally be quite keen to get a move on with it, not least to avoid paying property taxes unnecessarily.

And of course in the UK historical sale prices are public knowledge, unlike here where they are shrouded in mystery. So there is it pretty simple to know what a reasonable price is. Kicking yourself for not getting more would not really apply if all the other houses in the street sell for similar prices.

[tropo]

3 hours ago, KittenKong said:

 

That's debatable. But either way I wrote "quickly" not "too quickly", and by quickly I meant promptly or without undue delay.

 

For standard properties a few weeks is considered reasonable in the UK and anything that has not sold in that time would generally be considered to be overpriced or badly marketed or in some way undesirable. Obviously very unusual properties (windmills, towers, caves etc) might take much longer to sell even if the price is fair. But here most condos and houses are fairly normal, at least in the larger towns.

 

Here a few years is common and many years is not exceptional.

 

 

 

That's the mentality of a country where most property is not the domicile of the owner. In countries where most property is the domicile of the owner, the owner will normally be keen to get a reasonably prompt sale at a sensible price in order to buy another property to live in, and he can be fairly sure that wherever he is moving to will also be reasonably priced for the same reasons. It's not desperation but simple maths. Even those selling rental properties or second homes would generally be quite keen to get a move on with it, not least to avoid paying property taxes unnecessarily.

And of course in the UK historical sale prices are public knowledge, unlike here where they are shrouded in mystery. So there is it pretty simple to know what a reasonable price is. Kicking yourself for not getting more would not really apply if all the other houses in the street sell for similar prices.

My comment was based on the assumption that the property was located in Pattaya, owned freehold and the seller had no urgent need for cash. Quick in Pattaya does not relate to quick in the UK - it's all relative. If for example, the average sale takes 6 months, a property sold in a week was most likely underpriced.

[smutcakes]

10 hours ago, janclaes47 said:

 

But it is a completely different story on a +10 million Baht property of course.

 

Well yes, if you want a reduced commission i would advice giving an agent exclusive mandate to sell it. That way they can put the time, effort and resources into disposing it, knowing they are not going to get trumped at the end by someone else. Still 10 million is not exactly high value these days, but obviously there are far fewer buyers in the market, especially in Pattaya which makes finding a buyer that much harder.

 

if an agent really thinks you have a unique property which they can sell, and the owner has realistic expectations of value then i believe most would take reduced commission if they were given an exclusive mandate. If the property is ten a penny then it would work for both you and them not to do exclusive.

[smutcakes]

10 hours ago, KittenKong said:

 

If property was sensibly priced here it would sell quickly to an early viewer. This is why agents in the UK manage perfectly well on 1 or 2%.

 

The only reason that property hangs around forever here is because prices are much too high and quality is often low, and one of the main reasons that prices are much too high is because agents bump the prices up either in order to cream off the top or to have some extra margin for negotiation, or some other devious reason.

Just another example of bad Thai economics as far as I'm concerned.

In most cases i have seen, the price or at least the ball park figure is set by the owner. I would say it is fairly normal the world over to have your sale price and then add a % on to advertise, knowing you are likely going to have to negotiate. Not exactly rocket science negotiation but common the world over.

 

It would be much easier for an agent to make a quick buck by under pricing it and selling it quickly in weeks, than over pricing it and being stuck showing people around for month after month for an extra few thousand baht. Of course if they sold it quickly you would be the first one here accusing them of being devious and under pricing it for a quick sale.

 

[trogers]

54 minutes ago, smutcakes said:

In most cases i have seen, the price or at least the ball park figure is set by the owner. I would say it is fairly normal the world over to have your sale price and then add a % on to advertise, knowing you are likely going to have to negotiate. Not exactly rocket science negotiation but common the world over.

 

It would be much easier for an agent to make a quick buck by under pricing it and selling it quickly in weeks, than over pricing it and being stuck showing people around for month after month for an extra few thousand baht. Of course if they sold it quickly you would be the first one here accusing them of being devious and under pricing it for a quick sale.

 

I see many many advertising on Facebook. Those prices would not move any sales unless they are 40-50% of project launch prices.

 

It's not underpricing. Just the market price in a grossly oversupply situation and falling demand.

[Peterw42]

11 hours ago, KarenBravo said:

There's an agent here in Phuket who charges 3% from the buyer and nothing from the seller.

That cant possibly work, so if I buy a 1,000,000 baht condo from this agent it will cost me 1,030,000 (plus 3%) ? The only way the buyer is paying the commission is the list/agreed price plus 3%.

If commission comes out of the sale price, thats the seller paying. 

[smutcakes]

30 minutes ago, trogers said:

I see many many advertising on Facebook. Those prices would not move any sales unless they are 40-50% of project launch prices.

 

It's not underpricing. Just the market price in a grossly oversupply situation and falling demand.

To be honest i am talking more traditional agency where listings are on an agents website, window etc. If there is an element of demand, and some supply, an agent who deliberately tells the owner it is worth say X% below its real worth is likely to achieve a far quicker bit of commission than an agent who tries to add value on.

 

Obviously if there is no demand and huge supply then there is no demand and its fairly irrelevant. But again an agent overpricing in this situation is even less likely to make a sale. Which kind of makes my point i was making to Kittenkong, that devious agents putting the value above market price seems a particularity unrealistic and stupid way to be devious as you wont sell it.

[Peterw42]

Commission is a western concept and often doesn't fit into the Thai (Asian) buying and selling model.

 

Real estate is the same as any commodity such as fruit, the farmers sells to the market, the market sells to the shop, the shop sells to the consumer. Often goods are sold without actually owning the goods.

Each party gets what they want for the commodity and doesn't care what margin the next person adds.

 

An Agent will get you what you "want" for the property, any margin on top is considered normal and ethical. Often a chain of agents will all add a margin. Agents in Thailand dont just sell, they also buy and sell as part of the supply chain.

 

I watch my wife do it all the time, she has a seller who "wants" 1m baht for a condo, my wife will list the condo for 1.1m, another agent will find a buyer willing to spend 1.2m, and represent the buyer to my wife. The sale goes through, the seller gets his price and people in the supply chain also make money. For Thais, its no different than a farmer selling a box of fruit and a few people making money in the supply chain to the consumer.

 

Often a seller of a condo can have no knowledge, or control over, the final sale price. The same as a farmer doesnt know what his product sold for at a shop.

 

 

[KittenKong]

2 hours ago, smutcakes said:

It would be much easier for an agent to make a quick buck by under pricing it and selling it quickly in weeks, than over pricing it and being stuck showing people around for month after month for an extra few thousand baht. Of course if they sold it quickly you would be the first one here accusing them of being devious and under pricing it for a quick sale.

 

It's not just a "few thousand Baht". It's often hundreds of thousands.

[smutcakes]

59 minutes ago, KittenKong said:

 

It's not just a "few thousand Baht". It's often hundreds of thousands.

How do they make 100's of thousands of baht of extra commission by over pricing a condo!???? On a 2 million baht condo they would need to over price by about 6 million! Lol.

 

Must be fantastic sales person, perhaps you could give me the number of a person who can make 4 times market price for me.

Edited June 12, 2017 by smutcakes

[janclaes47]

10 minutes ago, smutcakes said:

How do they make 100's of thousands of baht of extra commission by over pricing a condo!???? On a 2 million baht condo they would need to over price by about 6 million! Lol.

 

Must be fantastic sales person, perhaps you could give me the number of a person who can make 4 times market price for me.

 

I think Kittenkong means that the overpriced part goes integrally to the agent, and the seller only get the price he originally listed it for minus the commission.

[KittenKong]

4 minutes ago, janclaes47 said:

 

I think Kittenkong means that the overpriced part goes integrally to the agent, and the seller only get the price he originally listed it for minus the commission.

 

Yes. Happens a lot here.

[steven100]

11 minutes ago, janclaes47 said:

 

I think Kittenkong means that the overpriced part goes integrally to the agent, and the seller only get the price he originally listed it for minus the commission.

which is wrong because the agent is altering the sale price that the seller considers fair to entice a possible buyer.