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Cheap commissions incite PM grief

04 September 2014 Elyse Perrau

Leading business development managers have highlighted how to combat landlords being lured in by the promise of cheap PM fees and unsustainable deals.

The comments follow the high levels of competition and the undercutting of management fees being witnessed throughout the property management industry.  

Elders Real Estate Belconnen business development manager and property manager Suze Forster said she comes up against other agencies dropping their prices all the time.

“I guess the main question we get, especially with a cold call, when somebody rings up is ‘What are your fees?’” she told Residential Property Manager.


“What I tend to do is open the conversation explaining my role, as a BDM, and then I shift their focus away from fees and go straight for customer service delivery.

“I [also] explain to them there have been a number of incidents with Canberra agencies – horror stories – of what can happen if you don’t go with the right agency,” she added.

Ms Forster said their standard management fee is 10 per cent, and the lowest they go is 8.8 per cent – in order to be financially sustainable.

“I explain to them they will find other agencies who will do it for seven per cent, inclusive of GST and some will do it for 6.5 per cent,” she said.

“At this point I explain to them that I use to work for an agency that was offering 5.5 per cent and they went belly-up – firstly because it is not financially sustainable, and in my experience in real estate, management fees and all other fees are directly in alignment with the level of service you get.”

Also speaking to Residential Property Manager, BDM Academy director Tara Bradbury said when being questioned about fees her main focus would be – rather than saying your fee rate straight away – to focus on creating the opportunity for an appointment.

“Focus on asking open questions rather than saying ‘Our fees are 8.5 per cent plus GST, but we do this’” she said.

“Always close along the lines of ‘Would 2pm on Thursday work for you, are you available?’ and put that opportunity out there.

“Look, there will always be those where you have that open-question approach and they will still direct to your fee, but you will have a better opportunity if you do at least take the chance to ask and try and encourage them around.

“I found a lot of the BDMs I work with have done that and their rate of achieving an appointment rather than having to discuss their fees over the phone has been much higher than it had been,” she added. 

Cheap commissions incite PM grief
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