No fee war out there yet

SHARE

Queenstown realtors insist they’re standing firm on commission rates – despite some cheeky vendors haggling for reductions. 

Locations partner Stacy Coburn reveals “more and more” potential sellers are trying to ask for discounts from the start. 

“There’s a lot of negotiating going on, full stop – it’s a sign of the times,” he says. 

|As revealed in Mountain Scene, Wakatipu realtors put through almost 20 per cent fewer residential deals in the first six months of 2010 than during the same period last year. 

But despite the slump, industry experts remain upbeat about current fee-pricing levels. 

“I don’t know that I’ve seen any significant fee war out there,” local Real Estate Institute of New Zealand spokesperson Adrian Snow says. 

“The only place I’ve come up against it is in mortgagee sales.” 

With one exception, local agencies charge vendors fairly similar fees. 

It’s about four per cent for sales up to $300,000-$500,000 and drops to two per cent above that – or 2.5 per cent in the case of Ray White. 

Browns Sotheby’s boss Julian Brown explains his company charges four per cent plus GST across the board “because we’ve got a track record in the high end [of the market]”. 

But there’s also “the potential of a rebate on a percentage of the marketing,” he adds. 

Coburn and Snow aren’t fans of people asking for fee reductions when selling. 

Coburn: “If you’ve provided a good professional real estate service and elicited a positive result, you expect to be paid your standard fee. 

“You don’t ask for 20 per cent off your doctor’s or lawyer’s bills.” 

Unlike the main cities, the “one per centers” – as firms charging virtually zip are known – don’t operate in Queenstown. 

Snow points out an agency that offered little or no commission lasted only six months here and he defends agents’ fees: “Business is very expensive – running an office, ground floor [rents]. 

“I don’t think there are too many real estate agents claiming they’re making excessive incomes at the moment.”
Local Harcourts agent Kelvin Collins adds: “We’re actually free till we get the job done.” 

The allegation that agents drop their commission rates to chase mortgagee sales is “a cheap shot”, Bayleys owner David Murray says. 

“I have known of no mortgagee or receiver instructed for a mortgagee who has chosen an agency on
commission rate. 

“Their mandate is to maximise the value of the property.” 

Local ReMax boss Brian McMillan doesn’t believe much commission-discounting is going on. 

“I’ve heard of a couple of companies that are but I’m not prepared to suggest who. I don’t play that game.”