Abolishing the traditional commission structure of sales agents can increase overall home sale profits by tens of millions a year, a new firm has found.
A new real estate service known as Hello Real Estate claims it can save home sellers from average losses of nearly $13,000 per sale by abolishing the customary commission structure, in favour of a fixed fee of $9,990.
Founder Phil Horan said he hopes to revolutionise the way properties are sold, creating a networked effect that puts more power into the hands of the consumer, similar to how Uber does with transport, AirBnB with accommodation, and Facebook has revolutionised the media industry.
“We’re linking the power of technology with the expertise of people to create a better experience for both seller and buyer,” he said.
“By charging a fixed fee, sellers achieve a fair and balanced result and retain a considerable saving for themselves.”
Josie Callanan* last year sold her home in Terrigal for $1,250,000 with the help of Hello Real Estate, and claimed to have saved $22,625 in real estate costs, with the exclusion of the usual agent commission (at 2%+GST), additional advertising costs (approximately $2,640) and the cost of conveyancing and settlement (approximately $1,650).
According to December 2015 figures from CoreLogic RP Data, it would cost a seller in Sydney an average of $17,600 to sell a $800,000 home through a traditional real estate model. With Hello’s fixed rate, Sydney sellers can save 43% of that cost.
*Name has been changed to protect the identity of the seller.