Why real estate agencies have high commissions?

Guide to the real estate jungle - Episode 10
30.Jun 2021
 
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In the Czech Republic, rental housing is still not as popular as abroad. Why is it? Maybe because every Czech personwould like to own the property. 

Real estate issues have already been solved by each of you, and you have certainly had experience with real estate agents. Someone of them made a great jib, another you would rather never come across again. And you would not pay penny for their services.

When I started my own business, I had no idea what I was getting into. Big money associated with real estate are not for free. Contrary,  they often mean big risks: fraud, defaults, high costs and life-threatening.

Luxusní prvorepubliková vila na prodej v Praze
Luxusní prvorepubliková vila na prodej v Praze,

The broker's paths are not just lined with carpets of luxury apartments…but also bricks of rough constructions. According to the new real estate law, we should be lawyers, architects, marketers and traders in one.

Before saying real estate brokers chargé too much, (commissions range is from 1% for independent brokers to 6% for foreign franchises).

There are a few things you probably don't about work of real estate brokers:

1. Don’t judge the intensity of broker's work based on the time he has spent with you.

For example: if the viewing lasted 30 minutes, add the trip time - another 30 minutes twice. It's an hour and a half.

You also don't know how many property viewings he had done before you. Statistically, there can be up to a hundred  property inspections before one serious buyer can be found.

Luxusní vila na prodej v Průhonicích
Luxusní vila na prodej v Průhonicích, Okolí Prahy

What about the trip coasts? How much does the repairman charge you?

Most real estate agents, with some exceptions, do not charge any fees for the viewings. So this service is free for all those who do not buy / rent the property. In comperance the repairman will not take a step without paying the trip costs, let alone replace your faucet in the kitchen.

2. Some properties have been sold for years - it's like single girls: it doesn't mean they're bad, but the right one hasn't appeared yet.

Imagine how the costs of such 5 years trade climb? Do you think it will still pay off for the real estate agency? To the owner, yes, because someone invests money in his property for  free and the owner doesn’t pay any interest.

3. Even if the business turns out well for you, it does not mean that the real estate agency will get its money too. How many times does it happen that the property owner did not pay the fee and it brought the agency to the court and to another coasts.

Real estate agents also have families, mortgages and their dreams.

Luxusní vila na prodej - Praha - Západ - 750m
Luxusní vila na prodej - Praha - Západ - 750m, Okolí Prahy

You probably have whom can you meet  at the real estate market in our country today. There are independent brokers who do not belong to any real estate agency, franchises (which have been decided by networks throughout the country), developers, premium real estate agencies (which have bought foreign brands to look better) and servers that I present as "unreal" , but brokers also work in them as well as in real estate.

It can look like one big mess. Which is fine, because the whole market is transforming into its new form: brokers become developers and developers and real estate servers without brokers - brokers.

What does this mean for you, the customers, and what threats await you?

Luxusní vila na prodej - Praha - západ - 632m
Luxusní vila na prodej - Praha - západ - 632m, Okolí Prahy

You will learn about this in the next series, The Real Estate Jungle Guide, in which we will focus on the following topics: how does it work in Czech real estate? New real estate scams. What to look out for when dealing with developers? What to look out for when choosing an investment property.

Sometimes we forget how lucky it is to have a roof over your head. We complain about everything around us and we don't appreciate what we own.

Therefore, before we say goodbye, I suggest doing such a thing: approach the property you own and put your left hand against its wall. Feel the heartbeat flowing directly to the foundations of the house through your left arm and say, "You are my house or apartment and I am proud to have you." Or "You're my rental apartment, but I'll have my own soon."

If you still did not see all our episodes please visit:

Episode 0            Your Guide Through the Real Estate Jungle - a new series

Episode 1            With professionals or without them?

Episode 2            How to choose a real estate agency?

Episode 3            How to determine the selling price of real estate?

Episode 4            Why are some properties unsaleable?

Episode 5            Rescue for Airbnb.

Episode 6            What to look out for when buying a property?

Episode 7            Real estate fraud - story of Prague vila.

Episode 8            Real estate fraud: Sale and rental of the same apartment

Episode 9            Why are the apartments in the Pařížská Street so overpriced?

Episode 10          Why real estate agencies have high commissions?

 

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Elena Jakubovic
Luxury Real Estates
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