Elite AgentOPINION

Why off the plan agents can earn a higher commission

With average residential real estate sales commissions generally around 1.5 to 2.5 per cent, earning six per cent on every sale sounds pretty attractive, right? Nice work if you can get it?

As a suburban agent, your ‘work’ is primarily to secure listings. Get the listing, negotiate the advertising budget with the vendor and sell the property when the right buyer bids at the auction, or you work with both buyer and vendor, ‘conditioning’ both to agree to a sale price. Success is measured by selling that one property as quickly as possible and moving on to the next one.

With off the plan sales, six per cent commissions – sometimes even higher – are available to agents who can sell the developers’ stock. In this world the ‘work’ is a little different and definitely requires a different mindset, but the sales rates can be just as high and the reward much greater.

In off the plan, you need to understand ‘solution selling’, where you are researching options and delivering a tailored solution to an individual buyer’s needs or goals. An off the plan sales agent must understand and embrace this ‘solutions’ mindset in order to be successful. You would be asking your potential buyer questions such as:

  • What budget do you have available?
  • What return are you seeking? (if an investor)
  • What locations are on your shortlist? (if an owner-occupier)
  • Would you buy interstate or overseas?
  • What timeframe are you looking for?
  • What deposit options do you require?
  • How will the property be financed?
  • What features does the property need to have?
  • Are you looking to minimise tax through negative gearing with the property?
  • Do you need to view potential properties in person, or just want the numbers to stack up on the right property sight unseen?
  • What capital growth are you seeking?
  • Is capital growth more or less important than cash flow?
  • Are you buying for yourself or for your family to live in now or in the future?
  • Does the property need to be close to a university?
  • Does the property need to be close to a train station or bus route?

It’s not primarily about selling one particular property or listing at all; it’s about really understanding the potential buyer’s needs, and then finding the perfect solution which fulfils the majority of those needs. That is solution selling at its most basic, and the agents consistently achieving impressive results are the ones who do this extremely well.

If you are an agent wanting to pivot your business to include the attractive higher commissions that off the plan attracts, it is certainly possible. You just need to make that mental shift from a securing-the-listing-at-all-cost focus, to an understanding-buyer-needs focus and a finding-a-solution focus.

May the commissions be with you!

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Jon Ellis

Jon Ellis is the Founder and CEO of Investorist, the property industry’s leading off the plan property marketplace. Investorist surveyed 201 of their customers, leaders in the property industry, about their sentiments over the coming financial year.