The Real Estate Institute of New South Wales has endorsed agents who negotiate traditional fee structures, warning that upfront fee models pose real price risks for properties listed for sale.
REINSW president Leanne Pilkington said that the current weaker market highlights the impact upfront fees have on sellers.
“There had been a lot of press surrounding companies that offer a flat-fee upfront to sell a consumer’s home rather than the traditional commission model,” the president said.
“There is no motivation or incentive for these agents to take a professional approach in achieving the best possible result as they have already been paid regardless of the outcome.”
Ms Pilkington added that while in stronger markets upfront fees can save sellers money, the concept itself is hard to properly assess due to bursts of high demand and low supply.
She said that there is no way to see how this payment method functions consistently over the long term.
“As the peak body, REINSW is therefore concerned for sellers in this changing market who are vulnerable to such low-cost, high-risk strategies that have the potential to leave them in the lurch,” Ms Pilkington said.
“We encourage consumers to explore a full range of options when it comes to selling their most valuable asset: Don’t just go for the lowest-cost option as the risks are too high if you get it wrong. Never take anything on face value. Do your research and ensure that you are making the best decision.
“As the market cools, the true value of an experienced real estate professional can really be seen.”