LOW COMMISSION REAL ESTATE AGENCIES...its your risk!  24 September 2018 written by Roger Ramos


The big news this week was the acquisition of Steeple by Property Fox, and recently the purchase of Pam Golding of a fixed fees of round about 1,5% or min R40k including vat, one can secure the services of these low commission operators.In our experience recently with Leadhome, we found that on a joint mandate basis, the Buyers really prefer to deal with a traditional Agency. A great Agent brings a lot to the table including an established database of buyers, negotiation skills and experience.The Agents role is to help the Seller with advice around valuations, marketing strategy and negotiating key elements of the contract! Including but not limited to…where will the money come from and when?


I always view these low comm operators, that actually act more as an advertising platform…what a rip off! Skip the low comm operator, and rather just pay the Property24 listing fee of approximately R1500…that is certainly a better deal.…now consider the article in respect of Steeples acquisition by Property Foxthat was posted this week as quoted in the press:

“It will add around 100 new sellers to our platform, giving clients a wider selection of quality properties to choose from. It is a business that, like PropertyFox, prioritises customer service, and along with its excellent reputation, will add substantial value to our offering,” said Crispin Inglis, CEO of PropertyFox.


Well just to give you an idea scale comparison, Team Ramos, consisting of only 4 sales agents, manages over 40 sole mandates at any point in time, and the average sales to asking price is 98,5%. Team Ramos is spending on average over R70k per month on marketing costs. Each of our agents has over 500 clients on their direct database, and our team website views since Jan 2018, is over 1,000,000 views.  In addition, we are part of a Team of over 50 agents at RE/MAX Helderberg and one of the top teams internationally, nationally, and currently no. 2 in the Western Cape.


You, know…I do empathise with Private Sellers, and to a certain extent with Sellers who want to make use of Low Comm operators (which makes me wonder really how qualified the low comm operators are, and what rung of the professionalism level they occupy…certainly not the upper echelons of top negotiating and knowledgeable skills…but perhaps I am wrong)…Here is an analogy for what its worth:


Selling privately/using a low comm operator is like taking your R400,000 BMW to a backyard one man operator mechanic…or buying the parts and spending Sunday under the hood trying to change oil, and sort the timing out…you just WOULD NOT do that!? And its only a R400k depreciating asset! You would most certainly take it a qualified professional with the right tools and experience.And…its only a R400k depreciating asset…the homes that we deal with vary in price between R600,000 and R12,000,000…I am go glad that the vast majority of clients are financially savvy to let qualified and experienced Agents assist them.