Page 4 - March 2021

FROM THE

DIRECTORS DESK

Does commission matter?

I have watched for some time as the debate on Fixed Vs. Variable estate agents fees have, over time gained traction. There
has been much debate around the validity of fixed fees, and recently an interesting development which should end all
these arguments.

The majority of the agencies across the country are on a variable fee structure, this is known as the traditional model.
Whilst there are variations within this model, the concept of charging a percentage of the sales price is and has been the
norm for many years. As with any industry, there are disruptors that come along from time to time, challenging the status
quo. In this instance I have seen two predominant fee structures being presented: a) A lower percentage fee-based model
and B) A fixed fee model.

It would seem both models are, however, short-lived. Whilst there is a benefit to a seller selling through one of these
channels, there remains a plethora of risk pre and post the sales process that most sellers seem to ignore. The fixation on
the agent's commission seems to govern the decision and generally becomes the central point of the transaction. Which
points to” you get what you pay for.” You cannot pay a VW polo’s installment and drive a Porsche; this is not how it works….

I never could understand why one would put the most prized possession at risk and in the hands of someone offering a
cheap deal. Through time, we have all been exposed to something that sounds too good to be true….

As with most other necessities, medical aides, pension funds, car installments, etc one tends to do a little homework before
committing to the agreement. Many of us get quotes and do comparisons ourselves and sometimes settle on a marginally
higher premium for a better-quality product through a reputable established brand, yet when it comes to managing the
biggest asset we have, we tend to look at price only. I have had clients insist on wanting to pay the fixed fee quoted by
other agents for our “Rolls Royce” services and they cannot understand why we say no? I have never walked into a Porsche
dealership and offered a Polos installment with much success…. why would this be any different?

The result of this debate around the fixed fee model…the agency that was charging a fixed fee with their strategy, that was
built on slandering the generic model, breaking down traditional agencies and advertising falsities’, has converted to a
variable fee agency, shame on you!

If you are willing to forego the comfort of security and open your home to complete strangers yourself, get limited
exposure and limited marketing for the first price on offer…. so be it. If you however want to get the best possible price in
the shortest possible time, with the security of knowing your prized possession is protected….then perhaps a more sensible
traditional tried and tested model is the way to go.

Why change something that isn’t broken….

Clinton Martle
Managing Director
Seeff Blouberg

blouberg.seeff.com 1