Beware the low or zero commission fee structure!

Beware of the low or zero commission fee structure! It is invariably true that you do get what you pay for. Almost any product carrying a discounted cost will attract either substandard quality or compromise on service, or both. It is misleading when agencies claim to offer a zero commission rate, the reality is that there is still a fee involved, it is just not based on a commission scale, but usually a flat rate fee. Advertising or marketing costs are an additional expense, invariably payable by the vendor irrespective of whether the property sells or not. Logic dictates that agencies who charge a low, flat rate fee are doing so, not because they actually want to earn less revenue. Let’s face it no one would willingly charge less than they could potentially charge. So, the business model is about attracting greater turnover which it seeks to do by offering discounted fee. The alarm bells should be ringing by now – put simply you place what is likely to be your biggest asset in the hands of an agent focused on turnover, and where any incentive to achieve a better price is substantially eroded by the replacement of a commission based fee with a flat fee. Clearly, this is not likely to be a great recipe for the best possible outcome for the vendor. As the market tightens, the more astute vendors are less likely to take a chance with their financial future and be a great deal more cautious about dabbling with false economy options.