Why paying your estate agent a higher commission can get you better results

The debate is over; the big Donald has had the final say – if you cannot sell your property, don’t fire your real estate agent, fire him or her up!

This comes from Donald Trump (he used to sack agents who couldn’t sell his “beautiful” buildings) in his address to the Australasian Real Estate Agents conference on the Gold Coast earlier this week.

Now he pays 7% to 8% commissions and he believes this works a treat.

I don’t disagree, and on several occasions, when it came to selling my own home, paid a financial incentive to get a higher price.  Not every agent took the money, instead donating the balance to charity.

According to IBISWorld, 5,000 people lost their jobs in the real estate industry in Australia over the last five years.  Revenue in the industry has dropped by close to 10% since 2007.

As we wrote a few weeks back it is defying gravity to expect real estate agents to work on a 2.5% commission structure.

Virtually no other business on the planet works off such low sales margins.

Good advice DT, but really, “beautiful”?

According to ABARES, there are 94 major mineral and energy advanced developments taking place across Australia.  These total $173.5 billion and importantly, they are advanced – meaning approved, with most underway.

• A breakdown of these projects is as follows:
• 35 energy projects – $116 billion total
• 35 mineral projects – $33.6 billion total
• 20 infrastructure projects – $19 billion total
• 4 mineral/energy processing projects – $5 billion total

Most are in Western Australia, with 39 projects totalling $109 billion, followed by Queensland with 28 projects for a combined $49 billion and New South Wales with $8.2 billion.

Again, as discussed last week, this isn’t a flash in the pan or fly-by-night operation, but major long-term developments.  These projects amount to some serious economic grunt and provide strong pillars of support.

I read something recently in the Economist to the effect that men are selfish layabouts.  Really?  I can only imagine the resounding guffaws from the fairer sex: “Tell us something we don’t already know,” they are yelling.

But you see – and I just love this bit – there’s apparently a reason for it.

An American study has found that …. wait for it … the amount of housework a man does depends on how much he dislikes it.  The more a male likes a task, the more of it he will do and vice-versa.

Not exactly revolutionary stuff; but it does give me incentive to confess a dirty little secret.  I do the clothes washing at my house – each weekend, dutifully sorting the whites from the darks.  It’s therapeutic, and well, everyone in the family agrees I’m just better at it.

But back to the study, the flip side of this finding is that the amount of housework that women do has nothing to do with how much they might like or dislike a task.  Women just get on with the job and do what has to be done.

Good-on-ya, girls!  We really didn’t need a study to tell us.  Where would we be without you?

And for all those males suffering from SLS (selfish layabout syndrome), you may now take solace from the fact that your condition is officially verified.  You are not alone.

Michael Matusik is the director of independent property advisory Matusik Property Insights. Michael is a 25-year veteran in the industry and his firm has helped over 550 new residential developments come to fruition. Michael has launched a new initiative, called Think Matusik. Think Matusik brings together expert opinion and select property opportunities.

Michael will present a free webinar on tips on buying your first property as an investment on Tuesday, June 5 at 12.30pm.