Firstly, all real estate agencies must have a corporate real estate agency license. This license is obtained from the Office of Fair Trading. The office of Fair Trading issue the license along with a License Number. With this number can check the licence to see if the company is licensed you can research the background of the agency for breaches to the act that the agency may have committed if you want to go down that track.
A franchise office is an agency where the owner of that particular agency chooses to align with a major or minor franchise network. The reasoning is that the franchise group will send the franchisee new listings. Also buyers may be drawn by the franchise name.
Franchise Groups can be expensive as they may charge their franchisees up to 10% of the gross commission. For example, a $500,000 home sale in Queensland is set by the State Government at $12,950 commission. The franchise fee may be up to $1,295 of the agency commission and goes direct to the head office of the franchisee.
Marketing Groups are very similar to franchise groups. They are a group of agents that prefer to govern their own business direction, but have joined a network for similar reasons to franchise groups, to gain a collective power of drawing in sellers and buyers to their business.
The main difference is that the marketing group membership costs can be much lower than that of a franchise network.
Using franchise and marketing group agencies can be beneficial, provided the agency in your area is an active agency. Be careful not to fall for the line “we are the biggest / sell the most / have the best ads on tv / we have the most buyers”. Even if they are the biggest agency in the area and you decide to list your property with them, there is no guarantee that you will get their best salesperson.
Independent Agencies work under their own banners, branding and name. All independents have to comply with the same government legislation as franchise and marketing group agencies.
Many sales agents are setting up their own independent agencies, mainly because of the advances in technology. Buyer loyalty to big brand networks is fading with the strength of the Internet Portals such as www.reiq.com www.realestate.com.au/buy, www.domain.com.au/ and many others. A good agency promoting the property professionally should generate the same number of buyer enquiries regardless if they are franchise, marketing or independent
If you choose to list your property with an independent, you may receive cheaper selling fees ie our agency has a flat fee of $8989.00 including gst up to $500,000 property sale a considerable saving. This is because they do not have the additional expenses the franchise and network agencies have.
IMPORTANT: Most sellers only sell once every 5 to 10 years. In that time the industry laws and the sales process can change many times. Do your research and check out every aspect of the current sales process. Don’t rely on “this is how we did it last time”. It could cost you thousands of dollars in a lower sale price or unnecessary sales commissions and advertising costs.